SMPG Corporate Actions
Global Market Practice - Part 1
Disclaimer
The Securities Market Practice Group is a group of experts who devote their time on a voluntary basis to define
global and local market practices for the benefit of the securities industry. The market practice documentation
and recommendations produced by this organization are intended to solve common problems across the
securities industry, from which financial institutions can derive clear benefits, to harmonize business processes
and to facilitate the usage of message protocols ISO 15022 and ISO 20022. While the Securities Market
Practice Group encourages the implementation of the market practices it develops, it is up to the financial
institutions within each market to implement the market practices according to their needs and agreements with
their business counterparts to support their businesses as efficient as possible.
Status:
Version:
Publication Date:
Author:
Final
SR2012 v1.0
21 February 2012
SMPG
SMPG Corporate Actions - Global Market Practice: Part 1
Table of Contents
1
Introduction ............................................................................................................................... 6
1.1
1.2
1.3
1.4
1.5
2
Revision Record .................................................................................................................................. 6
SMPG Market Practice Documents Overview ..................................................................................... 6
Scope of this document ....................................................................................................................... 7
Yearly Release Schedule .................................................................................................................... 9
Documents Maintenance ..................................................................................................................... 9
Category of Events and Flows ............................................................................................... 10
2.1
2.2
Categories of events .......................................................................................................................... 10
Communication flows ......................................................................................................................... 10
2.2.1 Mandatory Events Flows .......................................................................................................................... 10
2.2.2 Mandatory Events Flows With Entitlement Date Close to Payment Date ................................................. 12
2.2.3 Mandatory with Options Events Flows ..................................................................................................... 12
2.2.4 Voluntary Events Flows ............................................................................................................................ 13
2.2.5 Voluntary Rolling Events Flows ................................................................................................................ 14
2.2.6 Instruction Phase Flows ........................................................................................................................... 14
2.3
ISO 15022 messages ........................................................................................................................ 15
2.3.1 MT 564 Message Sending Sequence ...................................................................................................... 15
3
Notification Message (MT 564) ............................................................................................... 16
3.1
3.2
Generic Elements of a notification ..................................................................................................... 16
Function of the message. .................................................................................................................. 16
3.2.1 NEWM ...................................................................................................................................................... 16
3.2.2 REPE ....................................................................................................................................................... 17
3.2.3 ADDB ....................................................................................................................................................... 17
3.2.4 Cancel versus Withdrawal. ....................................................................................................................... 17
3.2.5 Should a CANC be used or a REPL? ....................................................................................................... 17
3.2.6 On Late announcement and well known events ....................................................................................... 18
3.3
Announcement status ........................................................................................................................ 18
3.3.1 On COMP ................................................................................................................................................. 18
3.3.2 On ENTL .................................................................................................................................................. 19
3.3.3 On INFO ................................................................................................................................................... 19
3.4
3.5
3.6
Event Category .................................................................................................................................. 19
Event type .......................................................................................................................................... 19
References ........................................................................................................................................ 19
3.6.1 Senders Reference .................................................................................................................................. 19
3.6.2 Corporate Action Reference ..................................................................................................................... 20
3.6.3 Official Corporate Action Event Reference ............................................................................................... 20
3.7
Linkages ............................................................................................................................................ 20
3.7.1 Linkage of different message types .......................................................................................................... 20
3.7.2 Linkage of MT564 ..................................................................................................................................... 20
3.7.3 Linking MT 564 and MT 568 ..................................................................................................................... 20
3.7.4 MT 564/568 Narrative Updates ................................................................................................................ 21
3.7.5 Linking multi-parts MT564 / MT 568 Announcements (when msg size limit is reached) .......................... 21
3.7.6 Linking 2 events ....................................................................................................................................... 22
3.8
Identification of securities. ................................................................................................................. 22
3.8.1 How to describe a security? ..................................................................................................................... 22
3.8.2 On multiple deposited securities............................................................................................................... 22
3.8.3 :94B::PLIS//EXCH/XLONOn Place of Safekeeping .................................................................................. 22
3.9 Account (single account, all accounts- not identified individually) ..................................................... 23
3.10 Balances ............................................................................................................................................ 23
3.10.1 Eligible Balance ...................................................................................................................................... 23
3.11 Event details ...................................................................................................................................... 23
SR2012 V1.0
Page 2
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
3.11.1 Date Prepared ........................................................................................................................................ 23
3.11.2 Record Date ........................................................................................................................................... 24
3.11.3 Ex Date .................................................................................................................................................. 24
3.11.4 Payment Date – Earliest Payment Date – Value Date ........................................................................... 24
3.11.5 Response Deadline ................................................................................................................................ 25
3.11.6 Announcement Date............................................................................................................................... 25
3.11.7 Restrictions............................................................................................................................................. 25
3.11.8 General on Options ................................................................................................................................ 25
3.11.9 On Event Options Details and tax rates ................................................................................................. 27
3.12 Interest payments .............................................................................................................................. 28
3.12.2 On Rates Declared for more than One Share ........................................................................................ 28
3.12.3 On The Usage Of Tax Free Information: ................................................................................................ 29
3.13 Tax Applicability Indicator Usage ...................................................................................................... 29
3.14 Movement Sequence Usage in the MT564 ....................................................................................... 30
3.15 Usage Guidelines for Narratives in the MT 564 & MT 568 ................................................................ 32
3.15.1 Additional Text (ADTX) ........................................................................................................................... 32
3.15.2 Narrative Version (TXNR) ...................................................................................................................... 32
3.15.3 Information Conditions (INCO) ............................................................................................................... 32
3.15.4 Information to be complied with (COMP) ................................................................................................ 32
3.15.5 Offeror (OFFO) ....................................................................................................................................... 32
3.15.6 Security Restriction (NSER) ................................................................................................................... 33
3.15.7 Declaration Details (DECL) .................................................................................................................... 33
3.15.8 Party Contact Narrative (PACO)............................................................................................................. 33
3.15.9 Registration Details (REGI) .................................................................................................................... 33
3.15.10 Registration Details (WEBB) ................................................................................................................ 33
3.15.11 Taxation Conditions (TAXE) ................................................................................................................. 33
3.15.12 Disclaimer (DISC)................................................................................................................................. 33
3.15.13 Name (NAME) ...................................................................................................................................... 33
3.15.14 Basket or Index Information (BAIN) ...................................................................................................... 33
3.15.15 Additional narrative remarks ................................................................................................................. 33
3.16 Reminder ........................................................................................................................................... 34
4
Movement Preliminary Advice Message (MT 564 – ADDB//CAPA) ...................................... 35
4.1
4.2
4.3
Introduction ........................................................................................................................................ 35
Business Need ................................................................................................................................... 35
Usage Rules ...................................................................................................................................... 35
4.3.1 Mandatory Events .................................................................................................................................... 35
4.3.2 Mandatory with Election and Voluntary Events ........................................................................................ 35
4.3.3 Replacement Preliminary Movement Advice ............................................................................................ 36
4.3.4 Cancellation of a Preliminary Movement Advice ...................................................................................... 36
4.4
Business Scenarios ........................................................................................................................... 36
4.4.1 Scenario 1: Mandatory Event – No preliminary Advice ............................................................................ 38
4.4.2 Scenario 2: Mandatory with Election and Voluntary Event - No Preliminary Advice ................................. 39
4.4.3 Scenario 3: Mandatory Event Ex Date = Pay Date ................................................................................... 40
4.4.4 Scenario 4: Mandatory Event ................................................................................................................... 41
4.4.5 Scenario 5: Mandatory Event with Reversal of Payment .......................................................................... 42
4.4.6 Scenario 6: Mandatory Event with Cancelled Reversal of Payment ......................................................... 43
4.4.7 Scenario 7: Mandatory Event with Critical Update ................................................................................... 44
4.4.8 Scenario 8: Mandatory with Election and Voluntary Event - New Instruction ........................................... 45
4.4.9 Scenario 9: Mandatory with Election Event - Cancel Instruction .............................................................. 46
4.4.10 Scenario 10: Mandatory with Election – No Instruction Received .......................................................... 47
4.4.11 Scenario 11: Voluntary Event – Cancel and Rebook Instruction ............................................................ 48
4.4.12 Scenario 12: Voluntary Event – Partial Election ..................................................................................... 49
4.4.13 Scenario 13: Movement Preliminary Advice for Market Claim & Compensation and Tax Refund .......... 50
5
Instruction Message (MT 565) ................................................................................................ 52
5.1
5.2
Identification of option selected on an Election. ................................................................................ 52
Usage of option code BUYA .............................................................................................................. 52
SR2012 V1.0
Page 3
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
5.2.2 One or two SECU in case BUYA is used ? .............................................................................................. 53
5.3
5.4
5.5
6
Confirmation Message (MT 566) ............................................................................................. 55
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
7
Clarification: QINS ............................................................................................................................. 53
Instruction Cancellation ..................................................................................................................... 53
Linking MT 565 and MT 568 .............................................................................................................. 54
On the use of the message ............................................................................................................... 55
Linkage to Previous and Related Messages ..................................................................................... 55
On the use of value date.................................................................................................................... 55
Gross Amount .................................................................................................................................... 55
What if benefits are not distributed all at the same time? .................................................................. 55
On usage of reversal in MT 566 ........................................................................................................ 56
Following an MT 565 Formatted with „UNS‟ as Option Number ........................................................ 56
Confirmation of sale of rights ............................................................................................................. 56
Option Number for Credit of Rights in a Rights Issue Event (RHTS) ................................................ 57
Movement Sequence Usage in the MT566 ....................................................................................... 57
Status Message (MT 567) ........................................................................................................ 59
7.1
7.2
7.3
General .............................................................................................................................................. 59
Event Status ...................................................................................................................................... 59
Instruction and Cancellation Status ................................................................................................... 59
7.3.1 Related Reference in Instruction Status ................................................................................................... 59
7.3.2 Reporting on Standing instructions and default actions ............................................................................ 60
7.4
7.5
Agreed Process Flow for IPRC (Instruction Processing Status) ....................................................... 60
Addition recommendations on specific MT 567 usage scenarios ..................................................... 60
7.5.1 Reporting on Standing Instructions and default actions ........................................................................... 60
7.5.2 Reporting of a Delayed Payment in the MT 567 section .......................................................................... 60
8
Message Independent Market Practices ................................................................................ 61
8.1
Official Corporate Action Event Reference (COAF) .......................................................................... 61
8.1.1 Background .............................................................................................................................................. 61
8.1.2 Principles .................................................................................................................................................. 61
8.2
Placement Of Date, Period, Rates & Prices (DPRP) data elements ................................................. 62
8.2.1 Presence of DPRP Elements per CAEV/CAMV Combination .................................................................. 63
8.2.2 Usage of Withholding of Foreign Tax rate (92a::WITF) in MT 564 Sequence E (566 seq. D) .................. 63
8.3
Placement of non-DPRP data elements ............................................................................................ 63
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12
8.13
8.14
8.15
8.16
8.17
8.18
8.19
8.20
8.21
8.22
Events with multiple proceeds ........................................................................................................... 64
Event on more than one underlying securities .................................................................................. 64
Expression of a rate ........................................................................................................................... 65
Multiple currencies with a non-convertible currency .......................................................................... 65
Notification and confirmation linkage ................................................................................................. 65
Resulting Amount .............................................................................................................................. 65
How to indicate that securities are blocked whenever instruction is received?................................. 66
On usage of N amount....................................................................................................................... 66
On the use of narrative field............................................................................................................... 66
Fractions paid .................................................................................................................................... 66
Price per Product ............................................................................................................................... 67
Rejection of pre-advice request for confirmation message ............................................................... 67
On negative and zero balances ......................................................................................................... 67
Offer Types ........................................................................................................................................ 67
Pool factors ........................................................................................................................................ 67
Usage of :92a: Rate Format Option M ............................................................................................... 68
Usage of UTC Offset Time For Dates ............................................................................................... 68
Usage of CA Option Code for Compensation of Rights Not Distributed ........................................... 68
Different Servicer Options for Different Deadlines ............................................................................ 69
8.3.1 Usage Of “UKWN” and “OPEN” for DPRP Elements ............................................................................... 63
SR2012 V1.0
Page 4
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.23
8.24
8.25
8.26
8.27
8.28
9
NOAC For VOLU Events ................................................................................................................... 69
Usage of CA Option Code for Unknown Proceeds (PRUN) .............................................................. 69
Accrued interests with a security proceed ......................................................................................... 71
Payment occurrence indicator ........................................................................................................... 71
Certification / Breakdown ................................................................................................................... 71
Clarification on the meaning of PRPP when used in an event with ADEX ........................................ 72
Market Practices on Particular Events ................................................................................... 73
9.1
Rights Issues ..................................................................................................................................... 73
9.1.1 One event ................................................................................................................................................. 73
9.1.2 Two events ............................................................................................................................................... 73
9.1.3 Illustration: One Event .............................................................................................................................. 73
9.1.4 Illustration: Two Events ............................................................................................................................ 74
9.1.5 Confirmation of rights distribution ............................................................................................................. 75
9.1.6 Sale of Rights ........................................................................................................................................... 75
9.1.7 Rights Expiration Notification ................................................................................................................... 75
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10
9.11
9.12
9.13
9.14
9.15
9.16
9.17
9.18
9.19
9.20
9.21
Offer ................................................................................................................................................... 75
On Payment of and principal amount and PRII ................................................................................. 75
Advising distribution rates for dividend with options involving a compulsory cash rate .................... 76
Booking out of valueless securities ................................................................................................... 76
Redemption of short term note .......................................................................................................... 76
Clarification of CAEV//DVOP (Dividend Option) and Currency Options ........................................... 77
Adjustment of Interest Rate ............................................................................................................... 77
CAEV//DRAW – What to use in place of REDM Qualifier (deleted in SR2006) ................................ 77
Use of Previous and Next Factors ..................................................................................................... 77
The OTHER Event ............................................................................................................................. 78
Placement of Cash Rates / Prices at Cash Movement Sequence .................................................... 78
Tax rate and taxable quantity for Stock Dividend events .................................................................. 78
Use of Unknown code with Fraction Dispositions (DISF) .................................................................. 78
Class Action in the US (MAND or VOLU) .......................................................................................... 78
Removal of TDMT (taxable income per dividend/share) ................................................................... 78
Use of Effective Date ......................................................................................................................... 79
Redemption after PCAL/PRED Partial Redemption .......................................................................... 79
Timeline for Dividend Reinvestment without Interim Line – Voluntary .............................................. 79
Cash Distribution From Non-Eligible Securities Sales ...................................................................... 80
Cash distributions with two or more components .............................................................................. 80
10 Market Claims and Interest Compensation ........................................................................... 81
10.1 Business Data Required and Message Flow .................................................................................... 81
10.1.1 Indication that Confirmation is for a Claim .............................................................................................. 81
10.1.2 Originating Settlement Transaction ........................................................................................................ 81
10.1.3 Balance of Settlement Transaction......................................................................................................... 81
10.1.4 Amount of Claim ..................................................................................................................................... 81
10.2 Other Observations ............................................................................................................................ 82
10.2.1 Value Date on Debit Entries ................................................................................................................... 82
10.2.2 Security Claims ...................................................................................................................................... 82
11 Proxy Voting Activities in ISO15022 ...................................................................................... 83
11.1
11.2
11.3
11.4
11.5
11.6
Announcement ................................................................................................................................... 83
Instruction (MT 565) ........................................................................................................................... 84
Results (MT 568) ............................................................................................................................... 84
Status (MT 567) ................................................................................................................................. 84
Proxy - Specification of Beneficiary/Intermediary Details in the Instruction ...................................... 85
Proxy - Split Voting ............................................................................................................................ 85
12 ISO 15022 - 20022 Coexistence Rules .................................................................................... 86
SR2012 V1.0
Page 5
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
1 Introduction
1.1
Revision Record
Version
Publication Date
Sections Affected
Description
SR2011 v1.1
8 September 2011
1.1; 3.10.1; 5.5; 5.8; 5.9; 7.2.2;
7.23
Various minor updates to v1.0 and
new MP for INDC usage for SR2011
in place of PRPP when no cash
move occurs (see section 7.2.2).
SR2012 v1.0
February 16 2012
New section 5 (on preliminary
advice message)
For the other sections, see track
changes.
1.2
SMPG Market Practice Documents Overview
The SMPG Global Market Practices for Corporate Action are defined in three main documents outlined here
below:
SMPG CA Global Market Practice Part 1: The present document. It covers the following topics:
-
Main corporate action message flows per category of events;
Market practices defined per message types;
Message independent market practices;
Market practices on particular CA events;
Market practices on market claims and interest compensation;
Market practice on Proxy Voting in ISO15022
SMPG CA Global Market Practice Part 2: This document covers the following information (provided
in the form of a Excel sheet file):
-
-
-
-
Event Interpretation Grid (EIG+): the EIG defines the allowed combinations of event types
and Mandatory/Voluntary indicators and for each combination, the allowed options and DPRP
(Date, Period, rate, Price) data elements that may apply globally and for local markets.
Date elements Placement Guidelines: Illustrates the allowed position(s) of the Date, Period,
Rate, Price and other qualifiers as defined in the ISO 15022 MT564 and MT 566 messages for
the SR2010.
Complex Events Grid: This table is used to ease the selection of the appropriate CAEV code
for complex events.
Redemption Matrix: This table is used to ease the selection of the appropriate redemption
event type by providing the key differences between the various redemptions events.
Return of Capital Matrix: This table is used to ease the selection of the appropriate return of
capital event type by providing the key differences between the various return of capital
events.
Distribution with Option table: This table gives the market practice for a rights event: either
in one event using CAEV//RHTS or in two or more events using CAEV//RHDI and a second
event CAEV//EXRI.
SMPG CA Global Market Practice Part 3: This document covers the following information (provided
in the form of a Excel sheet file):
SR2012 V1.0
Page 6
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
-
MT 567 Status and Reason Codes for instruction and Event processing status and :
Specifies the valid combinations of Status codes and Reason codes for the MT 567.
CA SMPG MT 567 Decision Table: Specifies the status and reason codes to be used
according to the result of the instruction and instruction cancellation processing.
The following important SMPG documents are complementary to the above global market practice documents:
SMPG CA Event Templates: This document provides examples of ISO 15022 MT messages for more
than 30 corporate events. Its purpose is to demonstrate with concrete examples the application
of various SMPG market practices (like the EIG+).
Proxy Voting Scenario: Illustrates how CAN MT‟s can be used to support proxy voting business
flows and scernario.
The above documents are all freely available for download from the SMPG web site ( www.smpg.info).
1.3
Scope of this document
This document records market practices, which is much wider than just SWIFT messages and fields. The
agreed principles are applicable regardless of the syntax or the carrier chosen. ISO 15022 examples and
syntax of the decisions are given for information. A table is given to precise implementation details in ISO
15022 when relevant.
Note on the extension to ISO 20022 messages
The next version of the CA SMPG market practice documents should start extending the market
practice definitions, illustrations and examples to the ISO 20022 corporate action messages suite as it
has recently been decided by the SMPG CA group members.
This present document is structured in several parts as follows:
-
Section 2 describes the agreed Corporate Actions flows per events category;
Section 3 defines market practices on the announcement message (MT 564);
Section 4 defines market practices on the instruction message (MT 565);
Section 5 defines market practices on the confirmation message (MT 566);
Section 6 defines market practices on the status and process advice message (MT 567);
Section 7 defines market practices that are applicable to all flows;
Section 8 defines market practices on specific corporate action events;
Section 9 defines market practices on market claims and interest compensation.
Section 10 defines market practices for the usage of the MT 56X messages for supporting the
proxy voting process;
Section 11 defines preliminary coexistence rules between the corporate action ISO 15022 – ISO
20022 Standards.
For each part, generic guidelines as well as SMPG decision are given. A reference to the meeting where the
decision was taken is made. However, the intention of this document is not to record the history of the
discussions but only to give the agreed results of the debates.
This documents contains market practices that have been defined or updated at any of the following
conference calls and meetings:
SMPG CA Telcos held on:
- In 2007: 12th February, 24th May; 21st June; 6th September, 6th December;
- In 2008: 10th January; 23rd January; 6th March; 19th March; 20th May; 26th June; 30th July; 13th
November;
- In 2009: 15th January; 18th March; 9th April; 14th May; 29th May; 18th June 2009; 24th September;
5th October 2009; 10th December 2009
th
th
th
th
th
th
th
- In 2010: 25 Feb., 25 Mar., 6 July, 4 Aug, 15 Sep., 13 Oct., 13 Dec..
nd
th
th
th
th
th
th
th
th
- In 2011: 2 Feb., 14 Mar., 6 May, 27 May, 29 , June, 14 Sept., 7 Nov., 30 Nov., 20 Dec.
th
- In 2012: 25 Jan..
th
th
SMPG Global Meeting in Boston, 5 – 6 October 2007;
SR2012 V1.0
Page 7
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
rd
th
SMPG Global Meeting in Paris, 23 – 25 April 2008;
th
th
SMPG Global Meeting in Vienna, 19 – 20 September 2008;
th
th
SMPG Global Meeting in Moscow, 5 – 7 May 2009;
nd
rd
SMPG Global Meeting in Frankfurt, 2 – 3 November 2009.
th
th
SMPG CA Meeting in Luxembourg, 27 – 29 April 2010
th
th
SMPG Global Meeting in Amsterdam 29 – 30 Oct. 2010
th
th
SMPG Global Meeting in Rio de Janeiro 5 – 7 April 2011
th
th
SMPG CA Meeting in La Hulpe – 10 – 11 October 2011
SR2012 V1.0
Page 8
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
1.4
Yearly Release Schedule
The SMPG CA Global Market Practice documents have two official releases per year. The objective of these
releases is to allow users and implementers to synchronise the implementation of the Global Market Practice
1
documents with the yearly SWIFT Standard Releases .
A draft (v0.1) of the Global Market Practice documents is first published in November of the year preceding the
year of the SWIFTSTandards release for which the market practices should apply.
2
A final version (v1.0) of the Global Market Practice documents is then published in February of the same year
of the Standards release for which the market practices should apply.
This is illustrated in the following graphical time line:
Annual
Standards
Release
Year «Y»
Feb.
Publication of
GMP Part X
SR200Y_V1.0
Final version for
implementation at next
annual standards
release
Annual
Standards
Release
Year «Y+1»
Nov.
Implementation
of GMP Part X
SR200Y_V1.0
and
publication of
GMP Part X
SR200Y+1_V0.1
Feb.
Publication of
GMP Part X
SR200Y+1_V1.0
Final version for
implementation at next
annual standards
release
Nov.
Implementation
of GMP Part X
SR200Y+1_V1.0
and
publication of
GMP Part X
SR200Y+2_V0.1
Example:
The version of the Global Market Practice documents published in November 2011 will be “v0.1”. This version
includes the updates to the market practices (or draft and new MPs) to be applied with the SWIFT Standards
release of November 2012.
This version v0.1 will evolve until February 2012, when it will become “v1.0”, the final version with market
practice updates to be applied in November 2012.
In November 2012, a new version will be released named “v0.1”, etc...
Interim versions:
Of course there could be interim versions of the Global Market Practice documents. These would be versioned
v0.2, v0.3.etc... However, this should remain exceptional. The objective of this release schedule is to keep the
number of versions in circulation to a minimum.
1.5
Documents Maintenance
Important changes to previous version of the Global Market Practice document part 1 are indicated with track
changes.
1
2
SWIFT Standards releases are always live on the SWIFTNet FIN network in November each year.
This new schedule with a publication in February (instead of May) shall apply only as of 2012.
SR2012 V1.0
Page 9
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
2 Category of Events and Flows1
As the event category (not to be confused with the event type) influences the CA flows, a broad categorisation
of events has been established. Based on this broad categorisation, generic communication flows are defined.
2.1
Categories of events
The SMPG agreed on the existence of 3 categories of events.
Mandatory events - Mandatory events are those defined as events where, the shareholder has no option or
ability to take action or influence the timing of the event. In short, the event will happen and there is no choice
for the holders.
E.g.: a stock split.
Mandatory events with Options - A mandatory event with options is defined as an event where, if the
shareholder does nothing, something will occur to change the shareholders holdings in terms of securities or
cash. However, the shareholder has a choice in which way he would like his holdings to be affected. In short,
the event will happen and the holder has a choice.
E.g.: Dividend Options
Voluntary events - Voluntary events are those defined as events where, the shareholder has option to have
his holdings affected. In short, the event may or may not happen and/or the holder can elect to take part or not.
E.g.: Tender Offer.
See the Event Interpretation Grid (EIG) in the GMP Part 2 for the allowed combinations of corporate action
events (:22F::CAEV) and categories of events (:22F::CAMV).
2.2
Communication flows
It was agreed there were at least 3 steps - Notification, Entitlement and Payment/confirmation for all categories
of event. Additional steps are required when options come into play. Flows were defined for all broad
categories.
2.2.1 Mandatory Events Flows
Legend of colored boxes:
CA Notification (MT 564 NEWM or REPL)
CA Notification MT564 REPE (with « EligibleBalanceIndicator » set*)
CA Movement Preliminary Advice (MT 564 NEWM or REPE +
22F ::ADDB//CAPA) (with optionally « EligibilityIndicator » set*)
CA Confirmation (MT 566)
* Available only in ISO20022 Notification or Movement Preliminary Advice message
1
SMPG meeting July 2000.
SR2012 V1.0
Page 10
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
A
Eligibility
( CANO - REPL )
+
Final
Entitlement
( CAPA )
or
Announcement
Notification
( CANO - NEWM )
Full Announcement
Notification
( CANO - REPL )
B
Final
Entitlement
( CAPA )
Confirmation
( CACO )
time
Entitlement
Date
Payment
Date
Examples of such events are stock dividend (DVSE) or cash dividend (DVCA) events. In this case, the
eligibility process could potentially be skipped as shown up in path B.
Preliminary announcement:
- Could include options.
- The preliminary announcement is sent as full details are known until the entitlement date is reached.
Full announcement:
- Including options.
- The full announcement is usually sent before the entitlement (see further chapter on announcement).
- Sometimes full announcement is not sent as full details are not known until the entitlement date is reached;
this is mainly the case for mandatory events.
Eligibility:
1
- EligibleBalanceIndicator : Indicates whether the eligible balance is final except for a voluntary corporate
action event where it can represent the current eligible balance when communicated before expiration date
of that event.
Final entitlement:
- If there is an "entitlement date" which might not be the case for events like take-over bid
- The entitlement message confirms (at the best of the servicer knowledge) the holdings of the account
owner at the “entitlement date” (e.g. ex date, record date, effective date…). Any “movements” (cash or
securities movements) in the entitlement message are theoretical movements, pending instructions.
2
- EligibilityIndicator : Indicates whether the movement preliminary advice is sent after entitlement date.
- Value is Yes (true) if sent after entitlement date and No (false) if sent before entitlement date.
Confirmation
- At the payment date, the message is sent to confirm to the account owner that securities and/or cash have
been credited/debited to an account as the result of a corporate action event.
1
Available in ISO20022 Notification message only
2
Available in ISO20022 Movement Preliminary Advice message only
SR2012 V1.0
Page 11
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
2.2.2 Mandatory Events Flows With Entitlement Date Close to Payment Date
Announcement
Notification
(CANO-NEWM)1
Full Announcement
Notification
(CANO-REPL)1
Final
Entitlement
(CAPA)
Confirmation
(CACO)
time
Entitlement
Date
(Payment Date -1)
Payment
Date
Examples of such events are Interest payment on ICSD (INTR) events.
1
For these events, the announcement notification messages are optional (for example, in the case of
predictable events like monthly interest payments).
Preliminary announcement:
- Could include options.
- The preliminary announcement is sent as full details are known until the entitlement date is reached.
Full announcement:
- Including options.
- The full announcement is usually sent before the entitlement (see further chapter on announcement).
- Sometimes full announcement is not sent as full details are not known until the entitlement date is reached;
this is mainly the case for mandatory events.
Final entitlement:
- If there is an "entitlement date" which might not be the case for events like take-over bid
- The entitlement message confirms (at the best of the servicer knowledge) the holdings of the account
owner at the “entitlement date” (e.g. ex date, record date, effective date…). Any “movements” (cash or
securities movements) in the entitlement message are theoretical movements, pending instructions.
1
- EligibilityIndicator : Indicates whether the movement preliminary advice is sent after entitlement date.
- Value is Yes (true) if sent after entitlement date and No (false) if sent before entitlement date.
Confirmation
- At the payment date, the message is sent to confirm to the account owner that securities and/or cash have
been credited/debited to an account as the result of a corporate action event.
2.2.3 Mandatory with Options Events Flows
Announcement
Notification
(CANO-NEWM)
Full Announcement
Notification
(CANO-REPL)
Eligibility
(CANO-REPL)
Final
Entitlement
(CAPA)
Instruction Phase
Confirmation
(CACO)
or
Entitlement
Date
1
Deadline
Date
time
Payment
Date
Available in ISO20022 Movement Preliminary Advice message only
SR2012 V1.0
Page 12
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Examples of such events are optional dividend (DVOP) or rights issue (EXRI) events. Income events as
currency options are also part of this case.
Preliminary announcement:
- Could include options.
- The preliminary announcement is sent as full details are known until the entitlement date is reached.
Announcement:
- Including options.
- The full announcement is usually sent before the entitlement (see further chapter on announcement).
- Sometimes full announcement is not sent as full details are not known until the entitlement date is reached;
this is mainly the case for mandatory events.
Eligibility:
- If there is an "entitlement date" which might not be the case for events like take-over bid
- The entitlement message confirms (at the best of the servicer knowledge) the holdings of the account
owner at the “entitlement date” (e.g. ex date, record date, effective date…). Any “movements” (cash or
securities movements) in the entitlement message are theoretical movements, pending instructions.
1
- EligibleBalanceIndicator : Indicates whether the eligible balance is final except for a voluntary corporate
action event where it can represent the current eligible balance when communicated before expiration date
of that event.
Final entitlement:
- It is not to be confused with the entitlement message.
- This step is optional and based on SLA/Market Practice requirements. It confirms the outturn benefits
based on the election made by the account owner. The uninstructed balance may be advised.
- The final entitlement message must include holding/positions.
Confirmation
- At the payment date, the message is sent to confirm to the account owner that securities and/or cash have
been credited/debited to an account as the result of a corporate action event.
2.2.4 Voluntary Events Flows
Announcement
Notification
(CANO-NEWM)
Full Announcement
Notification
(CANO-REPL)
Final
Entitlement
(CAPA)
Instruction Phase
Confirmation
(CACO)
or
Deadline
Date
time
Payment
Date
Examples of such events are put Redemption option (BPUT) events.
Preliminary announcement:
- Could include options.
- The preliminary announcement is sent as full details are known until the entitlement date is reached.
1
Available in ISO20022 Notification message only
SR2012 V1.0
Page 13
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Announcement:
- Including options.
- The full announcement is usually sent before the entitlement (see further chapter on announcement).
- Sometimes full announcement is not sent as full details are not known until the entitlement date is reached;
this is mainly the case for mandatory events.
Final entitlement:
- It is not to be confused with the entitlement message.
- This step is optional and based on SLA/Market Practice requirements. It confirms the outturn benefits
based on the election made by the account owner. The uninstructed balance may be advised.
- The final entitlement message must include holding/positions.
Confirmation
- At the payment date, the message is sent to confirm to the account owner that securities and/or cash have
been credited/debited to an account as the result of a corporate action event.
2.2.5 Voluntary Rolling Events Flows
Full Announcement
Notification
(CANO-NEWM)
Instruction Phase
Final
Entitlement
(CAPA)
Confirmation
(CACO)
time
Payment
Date
Voluntary Rolling Events:
Examples of such events are conversion (CONV) events In this case, the instruction can come any time during
life of the security.
2.2.6 Instruction Phase Flows
Reminder:
- Messages to customers that have not responded to the corporate action event by the deadline.
- This is strictly between the account servicer and account owner and would occur close to the deadline.
This message would only be sent in the event no election response was received or if a partial election
response was received.
- Reminder (if any) is strictly driven by SLA. Its details, e.g. whether a default option is indicated or when the
reminder is initiated, is also left entirely to parties based on SLA.
Processability:
1
- The processability message sent from the account servicer to the account owner is optional . It confirms
the reception of the instruction by the account owner and its "processability".
- Processability criteria are defined based on SLA between the 2 parties but are likely to involve a check on
the account, the quantity and the option. The scope of the processability is just to ensure that basics details
of the instructions are recognised by the account servicer.
- When no instruction has been received by the account owner, the account servicer may wish to notify to
the account owner that no instruction was received and that the default action was taken. This feature falls
either under the extension of the processability flow (not to confirm that the instruction was received but
1
Madrid meeting November 2000.
SR2012 V1.0
Page 14
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
that no instruction was received). Additionally the results of the default will appear in the (optional) final
entitlement notice when it is sent.
2.3
ISO 15022 messages
These flows map to the following ISO 15022 message types.
-
Preliminary and announcement: MT 564 with :23G::NEWM or REPL
Entitlement: MT 564, with function of the message :23G:REPE
Final Entitlement: MT 564 with function of the message 23G: REPE + 22F::ADDB//CAPA
Reminder: MT 564, function of the message :23G:RMDR
Instruction: MT 565
Processability of the instruction / Status (including default action notification): MT 567
Confirmation: MT 566
2.3.1 MT 564 Message Sending Sequence
The first announcement is, 23G:NEWM
Subsequent changes before eligibility require, 23G:REPL to be used.
At eligibility a further MT 564 to be sent, 23G:REPE.
Any subsequent eligibility and/or event details changes require, 23G:REPE
All messages after the first announcement contain a linkage block to the previous MT 564.
Seq.
Tag
A
23G
SR2012 V1.0
Qualifier
Decision Date
Implement. Date
April 2006
Nov. 2006
Page 15
Update Date
Open Item Ref.
CA 80
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
3 Notification Message (MT 564)
3.1
Generic Elements of a notification
An announcement message will include the following elements:
a)
b)
c)
d)
e)
f)
g)
h)
i)
Announcement Type (mandatory)
Announcement Status (mandatory)
Event Category (mandatory)
Event Type (mandatory)
Reference: Senders Reference (mandatory) - Unique corporate action reference (Mandatory)
Identification of the underlying securities via an ISIN (and description)
Account (single account, all accounts- not identified individually)
Balance (Optional)
Event details
-
Certificate Number (necessary in certain countries still dealing with physicals but optional element) is not
dealt with in this document but may be required in certain circumstances.
The more technical elements (such as sender or receiver) have not been included in the above list.
In the case where holdings are held in different places of safekeeping and the terms of the event differs,
the account servicer will either align the terms whenever it is possible or create two separate events (see
also section 3.13).
The SMPG felt that market practice could only be established on the "complete" notification rather than
preliminary or interim. In fact, preliminary or interim notifications are subsets of a "complete" notification
and information on the events are published in so many ways across the countries that attempting to
include "incomplete" notification in the Market Practice would not be realistic.
It may also be that the full announcement is not sent, as full details are not known until the entitlement date
is reached, this is mainly the case for mandatory events. In this case, the entitlement notice will contain the
full announcement details as well as the entitlement specific details (e.g. Mortgage-Backed instrument).
Date prepared is not a common element; the time stamp in the message header can supply this
1
information should it be required .
-
-
-
-
Let's look at these various elements and how they can be mapped into ISO 15022 messages.
3.2
Function of the message.
The announcement type is translated in an MT 564 by the function of the message.
There are different levels of notification such as early notification, confirmed notification, updated notification
and so on.
The function of the message (MT 564) indicates whether the announcement/notification is a new notification, a
replacement or a replacement with entitlements (other special functions exist: reminder, cancel or withdrawal)
3.2.1 NEWM
A new message (:23G:NEWM) is always used as the first notification for a given event. After a NEWM is sent,
any subsequent notification will be a REPL (Replacement) or Eligible balance notification (REPE).
For late announcement and well known events recommendations, refer to 3.2.4.
1
Seq.
Tag
A
23G
Qualifier
Decision Date
Implement. Date
Nov. 2000/Nov.2004
Update Date
Open Item Ref.
Nov.2002/May 2005
Madrid meeting November 2000.
SR2012 V1.0
Page 16
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
3.2.2 REPE
An entitlement message would contain all the same data elements as the notification but would include the
eligible balance (if not already previously reported).
When the record date and the payment date are consecutive, it was agreed that the Entitlement message may
be omitted and the Confirmation message will be sent when the benefit has been distributed. For individual
institutions, this depends on whether any delay is experienced whilst waiting for the benefit to be received.
Typically a domestic benefit is distributed on payment date and a cross-border benefit distributed when it is
received.
Seq.
A
Tag
Qualifier
Decision Date
Implement. Date
23G
REPE
NOV-2000
NOV-2002
Update Date
Open Item Ref.
If a final entitlement MT 564 is sent (i.e. after the response deadline of elections) then it should include details
1
of the actual stock and cash benefits .
3.2.3 ADDB
ADDB can be mentioned to notifiy an additional business process to a corporate action, for example
:22F::ADDB//CAPA, which indicates that the message is preliminary advice of payment.
3.2.4 Cancel versus Withdrawal.
WITH (withdrawal) should be used to void a previously sent message or in case the issuer has cancelled the
event. This implies that the corporate event number (CORP) will not be re-used.
CANC (cancel) is to be used when the sender wishes to cancel a corporate event previously announced by the
account servicer or a previously sent Preliminary Advice of Payment message (:22F::ADDB//CAPA in
sequence D). In this case, the field “:22F::ADDB//CAPA” must be present in sequence D of the MT564 CANC
message.
Seq.
Tag
A
D
23G
22F
Qualifier
ADDB
Decision Date
Implement. Date
Nov. 2000
Aug-2011
Update Date
Open Item Ref.
Nov.2002
SR2012 CR
Nov-2012
3.2.5 Should a CANC be used or a REPL?
Replace messages should be sent in all circumstances.
If a REPE message has been sent, then the replacing message containing the new details is also a REPE (not
a REPL).
When REPE is used, it is understood that the REPE message contain the entire set of information, not just the
elements replaced or added.
In case of a withdrawal, the specific withdrawal code should be used.
Seq.
Tag
A
23G
Qualifier
Decision Date
Implement. Date
Nov. 2000
Update Date
Open Item Ref.
Nov.2002
The CAEV, CAMV and Financial Instrument identification are crucial to the processing of an event; if one or
more of them changes the old event is to be cancelled by the account servicer and a new one started.
Seq.
1
Tag
Qualifier
Decision Date
Implement. Date
November 2009
November 2010
Update Date
Open Item Ref.
CA 155
Geneva meeting September 2002.
SR2012 V1.0
Page 17
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
3.2.6 On Late announcement and well known events
Late announcements
1) When a mandatory event is notified late and the entitlements are known, the rule “first notification message
= MT 564 NEWM” should be followed.
This NEWM (sent after record date) may include eligibility and entitlement details. If not, a REPE will need to
follow.
2) When a mandatory event is notified late, the entitlements are known and the payment date is in the past, for
consistency and easy automation purposes, it is recommended to issue a notification (MT 564 NEWM) before
sending the confirmation (MT 566).
From SR2006 a status code of ENTL may be used with the processing status qualifier of PROC,
25D::PROC//ENTL. This indicates that the message contains entitlements. In addition its use is restricted to
function of message NEWM, and requires the presence of one or more of movement sequences E1 and E2.
Seq.
Tag
A
25D
Qualifier
Decision Date
Implement. Date
Update Date
April 2006
November 2006
Open Item Ref.
CA 66
Well known events
For well known events, the rule remains that a NEWM should be used as first notification message. This
NEWM message may include eligibility and entitlement details. If not, a REPE will need to follow.
Well known events are typically fixed income events.
Event --
Well Known
564 Notification NEWM
564 Notification REPE
566 Confirmation
Mandatory
Optional
Mandatory
One off and message sent after
entitlements known and before
payment date
Mandatory
Optional
Mandatory
One off and message sent after
entitlements known and after
payment date
Mandatory
Optional
Mandatory
Note that the confirmation message is always sent when the event results in outturns of cash and/or stock.
Seq.
Tag
A
23G
3.3
Qualifier
Decision Date
Implement. Date
NOV-2000/NOV 2004
NOV-2002/NOV 2006
Update Date
Open Item Ref.
Announcement status
An announcement status can be confirmed or unconfirmed and complete or incomplete. The announcement
status is given in an MT 564 in the field :25D::PROC//
3.3.1 On COMP
The complete notification being defined as the notification containing all the needed elements for an event.. It is
obvious that at an early stage of the event, not all elements could be available. It was agreed that in such
cases, only the available data should be indicated rather than listing all the needed elements with a "to be
announced" or "unknown" value. The SMPG decided that a Notification message may be considered complete
1
when there are sufficient details for the client to make a decision . The needed elements required to consider
an announcement as complete should be determined on a Corporate Action (CA) by CA basis by National
Market Practice Groups (NMPGs) and documented as Mandatory elements in the EIG+
Seq.
Tag
A
25D
Qualifier
PROC
Decision Date
Implement. Date
NOV-2000
NOV-2002
Update Date
Open Item Ref.
A Preliminary Notification message may be sent, this is dependent on service level agreement.
1
Madrid meeting November 2000.
SR2012 V1.0
Page 18
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
A reminder Notification message may be sent to the client, again this is dependent on client agreement (and
1
thus falls out of the scope of global market practice) .
3.3.2 On ENTL
From SR2006 a status code of ENTL may be used with the processing status qualifier of PROC,
25D::PROC//ENTL. This indicates that the message contains entitlements. In addition its use is restricted to
function of message NEWM, and requires the presence of one or more of movement sequences E1 and E2.
Seq.
A
Tag
Qualifier
25D
Decision Date
Implement. Date
APR 2006
NOV 2006
Update Date
Open Item Ref.
CA66
3.3.3 On INFO
From SR2006 a status code of INFO may be used with the processing status qualifier of PROC,
25D::PROC//INFO. This indicates that the message is for information only, for example as a notification of an
opportunity to exercise a warrant or convert a security. Note that there will have been no announcement by the
market as this is a service provision.
Seq.
A
3.4
Tag
Qualifier
25D
Decision Date
Implement. Date
APR 2006
NOV 2006
Update Date
Open Item Ref.
CA68
Event Category
There are 3 categories of events (mandatory, mandatory with options and voluntary). Please refer to section
2.1 for definitions. This is indicated in an MT 564 using the appropriate code (MAND, CHOS, VOLU) in the field
:22F::CAMV//
See the EIG+ (reference source in the introduction) for further details.
Seq.
A
3.5
Tag
Qualifier
Decision Date
Implement. Date
22F
CAMV
Nov. 2000
Nov. 2002
Update Date
Open Item Ref.
Event type
Event type is to be given in the announcement. The structured manner of identifying the event is through an
appropriate code (see SWIFT documentation) in the field :22F::CAEV//
See the EIG+ (reference source in the introduction) for further details.
Seq.
A
3.6
Tag
Qualifier
Decision Date
Implement. Date
22F
CAEV
Nov. 2000
Nov. 2002
Update Date
Open Item Ref.
References
Any notification should contain at least 2 key references:
- the senders reference;
- the corporate action event number.
3.6.1 Senders Reference
The senders message reference is a reference used to identify uniquely each message sent.
Therefore each message sent - regardless of its function or event status - should bear a new and unique
senders message reference.
Seq.
A
1
Tag
Qualifier
Decision Date
Implement. Date
20C
SEME
Nov. 2000
Nov. 2002
Update Date
Open Item Ref.
Madrid meeting November 2000.
SR2012 V1.0
Page 19
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
3.6.2 Corporate Action Reference
The corporate action event reference - as opposed to the sender‟s message reference - is a reference to the
event.
This means that all messages pertaining to the same event should contain the same corporate action event
reference.
This reference should also be unique in the sense that for clarity two events should not bear the same
corporate action event reference.
Seq.
A
Tag
Qualifier
Decision Date
Implement. Date
20C
CORP
Nov. 2000
Nov. 2002
Update Date
Open Item Ref.
3.6.3 Official Corporate Action Event Reference
Refer to section 7.1 for the COAF market practice.
3.7
Linkages
Linkage is a mechanism to link different pieces of information.
SMPG has looked into rules on how to achieve a constant reliable way to reconcile and link the flow of
information.
In ISO 15022 this would be achieved by specific rules on how and when to use the linkage block (A1).
3.7.1 Linkage of different message types
In addition to the Corporate action reference (CORP), the market practice requires a link only to the preceding
notification message (:20C::PREV).
There is no market practice requirement to link the MT 564 REPE to the MT 565 election (:20C::RELA).
Therefore a single MT 564 REPE may be sent at the end of the response period, when the entitlements may
be calculated, to indicate the entitlements for each of the options instructed.
In addition there is no market practice requirement to reference the MT 565 instruction(s) in the MT566
confirmation, an instruction should be acknowledged with an MT 567 status.
Seq.
A1
Tag
20C
Qualifier
PREV & RELA
Decision Date
Implement. Date
APRIL-2005
NOV-2006
Update Date
Open Item Ref.
3.7.2 Linkage of MT564
When an update message is sent, it should always bear the unique reference to the corporate event number in
the sequence A of the message. The linkage block will contain the reference to the last previous sent message
using in the linkage subsequence the field :20C::PREV//
One will only expect a referencing to the last message sent, NOT to the whole chain of previous messages.
Seq.
A1
Tag
20C
Qualifier
PREV
Decision Date
Implement. Date
NOV-2000
NOV-2002
Update Date
Open Item Ref.
3.7.3 Linking MT 564 and MT 5681
It was agreed that the MT 564 should include a reference to a subsequent MT 568 - if a subsequence MT 568
is used.
It is strongly recommended NOT to use the MT 568 whenever possible as this narrative message hinders STP
(see later on rules for handling message above the limit of an MT 564).
The MT 564 link is only to be used when MT 568 follows immediately (same day); the MT 564 should not be
hold up because an MT 568 is following only a couple of weeks later. Otherwise a separate MT 568 can always
1
be sent later on, linking it back to the MT 564 .
1
Madrid meeting November 2000.
SR2012 V1.0
Page 20
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Example of forward linking
MT 564
:20C::SEME//1234
[use sub-sequence A1,
13A::LINK//568
:20C::CORP//16x (the CA Reference)
]
And the MT 568 should cross-reference to the MT 564 [use sub-sequence A1,
13A::LINK//564
:20C::PREV//1234 (the SEME of the MT 564)
Full forward linking, i.e. indicating in the MT 564 the reference of the MT 568 to come is difficult to do from an
IT point of view from a sender's perspective as it implies knowing the senders reference of the MT 568 before
having generating it.
Therefore the SMPG recommendation is to indicate in the MT 564 that an MT 568 will be sent without
indicating the reference of the MT 568 if available.
Seq.
A1
Tag
20C
Qualifier
PREV
Decision Date
Implement. Date
Mar-2001
Nov-2002
Update Date
Open Item Ref.
Affirmed that an MT 568 should NOT be sent independently. The MT 568 should be linked with the MT 564 as
per the existing Standards usage rules reading that “Usage rule of MT 568: This message should not be used
in lieu of a structured message, i.e., the MTs 564, 565, 566, or 567."
The Function of Message (field 23G) should be the same in the MT 564 and its associated MT 568. And,
before an MT 568 is sent, the relevant narrative fields of the MT 564 should be used.
Seq.
A
Tag
23G
Qualifier
Decision Date
Implement. Date
March 2007
N/A
Update Date
Open Item Ref.
CA 109
In case multiple MT 568s needs to be sent, the sequence of these linked MT 568s may be indicated by
page number in the narrative field.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
NOV 2004
NOV 2006
Update Date
Open Item Ref.
3.7.4 MT 564/568 Narrative Updates
Whenever a narrative text needs to be updated/amended in a MT 564, a replacement MT 564 shall be resent
with the whole updated/amended narrative text included i.e. the narrative text may not only contain the
amended or updated part of the narrative text.
In case multiple linked MT 568s have been sent, and one of the MT 568s needs to be replaced, the whole
sequence of linked MT 568 messages needs to be replaced.
If an MT 564 is to be replaced but the narrative content of any linked MT 568 does not need any changes,the
whole chain of linked 568 messages must be resent even if only the MT 564 is changing.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
NOV 2004
NOV 2006
Update Date
Open Item Ref.
3.7.5 Linking multi-parts MT564 / MT 568 Announcements (when msg size limit is reached)
Corporate actions announcement messages can eventually be long. This could occur for instance if there are
10s or 100s of different options to choose from within a given event or if a long list of 100s or 1000s of account
and account owners must be provided or if very long narrative text must be provided.
1
Boston meeting March 2001.
SR2012 V1.0
Page 21
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
In this case, accounts or options or long narrative information could eventually be split amongst several multiparts linked MT564 messages.and several multi-parts linked MT 568 messages. In those cases, the pagination
element in the MT 564 and 568 can be used.
In this case, the SMPG recommends to refer to the market practice defined by ISITC in their local market
practice document. Please refer to www.isitc.org for more information on this.
Seq.
A
Tag
28E
Qualifier
Decision Date
Implement. Date
Aug-2011
Nov-2012
Update Date
Open Item Ref.
SR2012 CR
3.7.6 Linking 2 events
When two events are intertwined, it is possible to link two events together.
This can be achieved in ISO 15022 using the linkage subsequence and the qualifier CORP in the field :20C::
The reference given in that field is the corporate action event number to the linked event, not the senders
message reference of the other event It is of course possible to link more than 2 events together by repeating
the linkage subsequence.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
A1
20C
CORP
NOV-2000
NOV-2002
3.8
Update Date
Open Item Ref.
Identification of securities1.
3.8.1 How to describe a security?
The ISIN should be used as a minimum, following the recommendation from G30.
If another number scheme is used then it must have description.
Seq.
B
Tag
Qualifier
35B
Decision Date
Implement. Date
NOV-2000
NOV-2002
Update Date
Open Item Ref.
3.8.2 On multiple deposited securities
If a security is listed on more than one exchange, and the terms of the event differ depending on the exchange
(such as the ex date, for instance), then it is recommended to send two separate corporate action notifications.
It is to be noted that a formatted place of listing field is available in ISO 15022 messages. This avoids the
account servicer having to identify the concerned place of listing in a narrative way.
This field :94B::PLIS is available in the Financial Instrument Sequence B1 following the identification of the
financial instrument (:35B:) for which the place of listing is needed.
Example:
3.8.3 :94B::PLIS//EXCH/XLONOn Place of Safekeeping
a) If different places of safekeeping but same details, 1 message is allowed.
b) If different details (due to different places of safekeeping), 1 message per place of safekeeping.
Seq.
Tag
Qualifier
B2
Decision Date
Implement. Date
MAR 2001
NOV-2002
Update Date
Open Item Ref.
Place of safekeeping will be identified using the specific place of safekeeping field.
1
Seq.
Tag
Qualifier
Decision Date
Implement. Date
B2
94a
SAFE
MAR 2001
NOV-2003
Update Date
Open Item Ref.
Madrid meeting November 2000.
SR2012 V1.0
Page 22
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Account (single account, all accounts- not identified individually)1
3.9
A single Notification message may be sent when a client owns more than one account using the
97C::SAFE//GENR syntax. Entitlement quantities &/or amounts must not be supplied when using this syntax.
The usage of this ISO 15022 feature is used is dependant on the account servicer.
An entitlement message is sent for each individual account owned by the client (note that the entitlement must
be calculated individually for confirmation).
A confirmation message must be sent for each individual account (this is a mandatory message rule).
Seq.
Tag
Qualifier
Decision Date
Implement. Date
B2
97C
SAFE//GENR
October 2006
N/A
Update Date
Open Item Ref.
SR2007 III.37
3.10 Balances
There was no definitive agreement in terms of whether or not all notifications should contain holding/positions.
Based on local practices and/or SLA, holdings may only be given at the time of entitlement.
Some countries also have a practice of sending a final entitlement notification after the instruction/elections are
received but following the period when elections are closed.
3.10.1 Eligible Balance
The SMPG established that the eligible balance is calculated, discussed how it is calculated and concluded
there is no standard method.
Eligible Balance used in the MT 564 entitlement message =
Actual (booked) balance (at best of knowledge at the time the entitlement is calculated)
2
+/- any transactions (of all types) that will affect the client‟s final entitlement.
The “at best of knowledge” phrasing of the definition allows for variations in national market practices and
SLAs; for instance, whether unmatched transactions are included.
Each NMPG should document the composition of the eligible balance based on their country specifics. If
different from the above definitions and recommendations, it should be stated in the country specific CA MP
document.
Other balances can be provided in addition to the eligible (ELIG) balance. For all those additional balances, it is
possible to further specify a balance using the balance type code “eligible” or “non-eligible”. If the balance type
code is not specified, it is understood as being “eligible”.
Some markets would like to breakdown the eligible balance on the Preliminary Notification message, this is
dependent on client agreement (and thus falls out of the scope of global market practice).
3.11 Event details
The notification will contain the event details such as dates, rates, ratio and amounts. The presence of specific
date, period, price or rate, as optional or mandatory elements, has been documented in the SMPG Global
Market Practice part 2 (EIG+).
The SMPG has worked on clarifying the definition and usage of some details:
3.11.1 Date Prepared
Date prepared is not a common element; the time stamp in the message header can supply this information
should it be required.
Seq.
A
1
2
Tag
Qualifier
Decision Date
Implement. Date
98a
PREP
JUN-2001/JAN 2002
NOV-2002
Update Date
Open Item Ref.
Madrid meeting November 2000.
Brussels meeting June 2001.
SR2012 V1.0
Page 23
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
3.11.2 Record Date
Record date is at the close of the day .
This translates in ISO 15022 into a field 98a with a specific qualifier.
In markets where the eligible balance is struck on record date, it is done at the close of the record date.
Seq.
D
Tag
Qualifier
Decision Date
Implement. Date
98a
RDTE
MAR 2001
NOV-2002
Update Date
Open Item Ref.
3.11.3 Ex Date
1
Ex-date is beginning of the day
This translates in ISO 15022 into a field 98a with a specific qualifier.
In markets where the eligible balance is struck on ex-date, it is done at the start of the ex-date.
Seq.
D
Tag
Qualifier
Decision Date
Implement. Date
98a
XDTE
MAR 2001
NOV-2002
Update Date
Open Item Ref.
3.11.4 Payment Date – Earliest Payment Date – Value Date
Payment date (PAYD) is a common element and it is the date supplied by the issuer of the CA. Note that
redemption date is agreed to be equal to the payment date.
When in an announcement (MT 564), the payment date (PAYD) is a non-banking date, the earliest payment
date (EARL) may be used to indicate the actual payable date, i.e. the date when the payment will be processed
in the system. It is however optional.
Value Date (VALU) is used to indicate the date at which cash starts to earn interests in a credit entry or ceases
to earn interests in a debit entry.
Note: on non-banking date: Posting date in the MT 566 and Value date in both the MT 564 and the MT 566
must be a banking date.
This translates in ISO 15022 into a field 98a with a specific qualifier.
Example
If a credit payment falls on a weekend, the earliest payment date would likely be the first
banking
day following. The value date could be either the first banking day after pay date (likely):
:16R:CASHMOVE
:22H::CRDB//CRED
:19B::ENTL//USD112569,75
:19B::GRSS//USD132435,
:19B::TAXR//USD19865,25
:19B::NETT//USD112569,75
:98A::PAYD//20110522 ---- falls on a Sunday
:98A::VALU//20110523 –-- falls on Monday
:98A::EARL//20110523 –-- actual date account credited on Monday
:92A::INTP//2,7
:92A::TAXR//15,
:16S:CASHMOVE
In a debit payment, same scenario can occur but value date would be the last banking
day before pay date:
:16R:CASHMOVE
1
Boston meeting March 2001.
SR2012 V1.0
Page 24
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
:22H::CRDB//DEBT
:19B::ENTL//USD112569,75
:19B::GRSS//USD132435,
:19B::TAXR//USD19865,25
:19B::NETT//USD112569,75
:98A::PAYD//20110522 ---- falls on a Sunday
:98A::VALU//20110520 –-- falls on Friday
Seq.
Tag
Qualifier
Decision Date
Implement. Date
E/E1/
E2
98a
PAYD/EARL/
VALU
NOV 2000
NOV-2002
Update Date
Open Item Ref.
Nov-2011
3.11.5 Response Deadline
The group agreed that this should be the local time zone of the account servicer. The time zone of the account
servicer is always known (SLA). This information should be stored in the system, it should not be in the
message. This is the case for corporate actions as well as for settlement. The response deadline date should
be formatted using the RDDT date qualifier.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
98a
RDDT
JUN-2001/JAN 2002
NOV-2002
Update Date
Open Item Ref.
If :98E:: date format with UTC time is used for Response Deadline or Early Response Deadline, then UTC time
without any offset specifies means GMT time.
Seq.
Tag
98a
Qualifier
RDDT
Decision Date
Implement. Date
September 2010
Update Date
Open Item Ref.
NOV-2010
3.11.6 Announcement Date
The Group affirmed that the announcement date is as defined by the issuer. No change in MT as new info
1
arises .
Seq.
A
Tag
Qualifier
Decision Date
Implement. Date
98a
ANOU
JUN-2001/JAN 2002
NOV-2002
Update Date
Open Item Ref.
3.11.7 Restrictions
Restrictions are common.
If they are restrictions, they should be indicated in the announcement or as soon as known.
This translated in ISO 15022 by the following two narrative fields in the CA messages, i.e., conditions for the
offer (INCO) and conditions to be complied with (COMP).
The group agreed that there is no need to have extra keywords after the existing qualifiers as a narrative will
follow anyway. This however does not prevent some countries to investigate the use of such codes at country
2
level .
Seq.
Tag
Qualifier
Decision Date
Implement. Date
70a
INCO/COMP
Jan. 2002
Nov. 2002
Update Date
Open Item Ref.
3.11.8 General on Options3
The event might contain options.
The options are identified in ISO 15022 by an option code and an option number. (22F::CAOP - 13A::CAON).
Each option is contained in an occurrence of the sequence E of the MT 564.
See the Event Interpretation Grid (EIG) for matching between corporate action events (:22F::CAEV) and
corporate action option codes (:22F::CAOP).
1
London meeting January 2002.
Boston meeting March 2001.
3
Boston meeting March 2001.
2
SR2012 V1.0
Page 25
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Seq.
A &E
Tag
22F
Qualifier
CAEV & CAOP
Decision Date
NOV 2005,
Affirmed APR 2006
Implement. Date
NOV 2006
Update Date
Open Item Ref.
CA06
The option code and option number are mandatory in the MT 564 (and MT 566).
Any options added by the account servicer should be added after the issuer's options in numerical terms and
for each of those added options, the Option Feature indicator code ASVO (:22F::OPTF//ASVO) should then be
present.
Seq.
E
Tag
Qualifier
Decision Date
Implement. Date
22F
OPTF
August 2011
Nov. 2012
Update Date
Open Item Ref.
SR2012 CR
It is recommended that in the MT 564, the options numbering follow these rules:
1. The option numbers should start from 001.
2. Incremental by 1 should be the rule (do not "jump" numbers).
3. Only numeric characters should be used (no alpha characters).
4. The option number order should be kept throughout the life of the event (between account servicer and
account owner).
5. Announcement can always be updated (replaced) except if CAEV and/or CAMV and/or underlying
security change
6. When an option is cancelled/inactivated, it will remain in the notification, with the same option number,
and option status (OSTA) inactive (INTV) or CANCelled. Added options are given a new number
(Option numbers are not recycled). If an option detail is changed in the market, it is up to the account
servicer to assess if the change can lead to confusion. If it may lead to confusion, the SMPG
recommendation is to list the original option as status cancelled and include a new option. If the
change will not lead to confusion, the account servicer should update the original option.
.
Seq.
E
Tag
Qualifier
Decision Date
Implement. Date
13A
CAON
JUN 2003
MAY 2005
Update Date
Open Item Ref.
3.11.8.1 Identification of an option selected on an Election1.
See chapter 4 on Instruction message (MT 565).
3.11.8.2 Default Option and Standing Instruction
Default option
The default option identified is the default decided by the sender of the message, i.e. the account servicer. It
may or may not be the default option of the issuer. Whether default options will be provided by account
servicer should be specified by SLA.
Technically, the default action flag of each sequence E could be set to N. There is no obligation to have a flag
set to Y.
Seq.
E
Tag
Qualifier
Decision Date
Implement. Date
17B
DFLT
JUN 2001
NOV 2002
Update Date
Open Item Ref.
The account servicer may or may not send an unsolicited MT 567 to provide a status on the action taken for
any uninstructed balance based on the default action. This is to be agreed in the SLA.
Standing instructions
Standing instructions may or may not be offered by the account servicer. It must be agreed at SLA level.
A standing instruction always overrides an MT 564 notified default option if they are different.
The order of prevalence is:
1. specific instruction MT 565
2. standing instruction (when SI are lodged at the account servicer as per SLA)
1
Geneva meeting September 2002 and Brussels meeting June 2003.
SR2012 V1.0
Page 26
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
3. default action.
Seq.
E
Tag
Qualifier
Decision Date
Implement. Date
17B
STIN
JUN 2003
MAY 2005
Update Date
Open Item Ref.
The account servicer may or may not send an unsolicited MT 567 to provide a status on the action taken for
any uninstructed balance based on a standing instruction. This is to be agreed in the SLA.
3.11.8.3 Standard for 35B when ID of Outturn Security Not Known.
The SMPG preference is for „UKWN‟ as it is an existing code used with other qualifiers.
Seq.
Tag
E / E1
35B
Qualifier
Decision Date
Implement. Date
APRIL-2005
NOV-2006
Update Date
Open Item Ref.
3.11.8.4 Over Election/Subscription – Option Code and Option Feature
Agreed that option feature 22F::OPTF//QOVE (Feature whereby the holder can elect a quantity to receive over
and above normal ensured entitlement) is a duplication of option code 22F::CAOP//OVER (Subscribe to more
new shares than underlying securities position allows, when terms and rights issue allows it) and
recommended NOT to be used together.
Conclusion was that the option feature 22F::OPTF//QOVE may be used with an option code of
22F::CAOP//SECU, CASE or EXER (not OVER) to inform that for the specific option, there is the possibility to
over elect.
The MT 565 following would be expected, in case of the client decided to profit from the over election feature,
to contain :36B::QINS or QREC (depending on the event) + :36B::QOVE.
Seq.
E
Tag
Qualifier
22F
CAOP
OPTF
&
Decision Date
Implement. Date
Telco
2006
NOV 2007
September
Update Date
Open Item Ref.
Question: what is mentioned in the field QREC when both QREC and QOVE are present in the MT565?
3.11.9 On Event Options Details and tax rates1
What happens in case of omnibus account for income? In that case, multiple accounts per one notification
does not work for income because of the different tax rates.
a) one client
Account A: 30%
Account B: 15%
Account C: 15%
Question: one MT 564 per account should be sent, however, should the details of the announcement be
changed in the three messages? It was said that if only general information is in the message, then the
information doesn‟t need to change. However, if rates are included then the contents must be changed.
It was agreed that if income is involved, there will be one announcement per account.
b) omnibus account (30% and 15% rates are mixed)
There will be a default rate on the account unless you tell the local custodian the breakdown. The French
proposal is to have one MT 564 with multiple options for the different tax rates (option 1 is 30%, option 2 is
15%). In the MT 565, then the Account owner selects one option and provides in a narrative or by mail the tax
breakdown. Then the MT 566 and 567 can follow as they normally do.
Position 1000 – 30%
Position 1000 – 15%
564
---------------->
option 1 30%
1
Boston meeting March 2001.
SR2012 V1.0
Page 27
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
option 2 15%
565
<--------------option 1 for 1000
565
<--------------option 2 for 1000
It was discussed whether the custodian needs to send the information that he received from the local custodian
to the Account Owner. It was indicated that MT 564 need to be sent further on because, they need to give a
reply, i.e., the tax breakdown, otherwise the STP process is broken. Some members indicated that you need to
do this in order to give the response deadline for the tax breakdown.
3.12 Reminder
The following are some guidelines on the ability to send reminder messages to customers who have not
instructed fully on their eligible balance for the corporate action event before the deadline.
This flow is strictly between the account servicer and account owner who has not responded and would occur
just prior to the close of an offer. This flow would only be sent in the event no election response was received
or if a partial election response was received. This flow is optional and usage/timing is left to SLA.
If sent, it must be an MT 564 bearing the RMDR function.
Uninstructed balance will inform the account owner on the quantities for which no instruction was received.
UNBA
Uninstructed Balance
Balance of uninstructed position.
INBA
Instructed Balance
Balance of instructed position.
Seq.
Tag
B2
93
3.133.12
Qualifier
Decision Date
Implement. Date
UNBA-INBA
JAN 2002
NOV-2002
Update Date
Open Item Ref.
Interest payments
1
3.13.13.12.1 On Intermediate Payments
How should the rate intermediate payments be handled for both fixed income securities and equities?
The SMPG decided that the interest period and the rate on which the interest payment is based on, or the
current rate (for a floating rate note) should be supplied.
The interest rate for the interest period is indicated using the INTP rate qualifier. The method of interest
calculation may be supplied.
It is also recommended for Floating Rate Note that, as soon as the rate is known, a notification be sent and a
confirmation when the payment is made. It is NOT recommended to announce both the current and the next
rate in the same event.
Payment frequency: If there is a period and calculation method in the message, the payment frequency is
deemed as not being necessary.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2003
MAY-2005
Update Date
Open Item Ref.
3.13.23.12.2 On Rates Declared for more than One Share2
Some securities, eg in Brazil, publish payment rates at greater than a single share, e.g. per 100 or per 1000
held, this is the tradable unit. In order to remove any ambiguity the definition of rates in ISO 15022 should be
amended to quote the rate „per tradable unit‟.
1
2
Brussels meeting June 2003.
Geneva meeting September 2002.
SR2012 V1.0
Page 28
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
The format for these payments would be:
For a CAEV of INTR,
93B::ELIG//UNIT/number of equity securities
92F::INTR//amount to be paid [published rate]
22F::DIVI//SPEC
with 'Rate announced per 100 shares' or 'Rate announced per 1000 shares' in the narrative.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2002
MAY-2005
Update Date
Open Item Ref.
3.13.33.12.3 On The Usage Of Tax Free Information:
With the implementation of SR 2005, the GRSS rates have become repetitive, so that it is possible to use
:92J::GRSS//TXBL and :92J::GRSS//TXFR.
Examples for dividends processing/mapping
The dividend is announced at 10 EUR per share
a) Fully taxable event (20% basis rate)
a1) Customer is taxed
:92J::GRSS//TXBL/EUR10, or :92F::GRSS//EUR10,
:92A::TAXR//20,
:92F::NETT//EUR8,
a2) Customer is not taxed (based on tax status)
:92J::GRSS//TXBL/EUR10, or :92F::GRSS//EUR10,
:92A::TAXR//0,
:92F::NETT//EUR10,
b) Partially taxable event (8 taxable, 2 non-taxable)
b1) Customer is taxed
:92J::GRSS//TXBL/EUR8,
:92J::GRSS//TXFR/EUR2,
:92A::TAXR//20,
:92F::NETT//EUR8,4
b1) Customer is not taxed (based on tax status) + 10% fees
:92J::GRSS//TXBL/EUR8,
:92J::GRSS//TXFR/EUR2,
:92A::TAXR//0,
:92A::CHAR//10,
:92F::NETT//EUR9,
3.13 Tax Applicability Indicator Usage
TXAP “may only be used when no tax rate is provided in the message. The purpose is to inform of the
taxability, at a later stage/event, of the securities credited in this stage/event.
:16R:GENL
:20C::CORP//
:20C::SEME//
:23G:REPE
:22F::CAEV//SOFF
:22F::CAMV//MAND
:25D::PROC//COMP
:16R:LINK
:13A::LINK//564
SR2012 V1.0
Page 29
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
:20C::PREV//
:16S:LINK
:16S:GENL
:16R:USECU
:35B:ISIN XX0000001234
ABC SHARES
:16R:ACCTINFO
:97A::SAFE//12345
:93B::ELIG//UNIT/10000,
:16S:ACCTINFO
:16S:USECU
:16R:CADETL
:98A::ANOU//YYYYMMDD
:98A::XDTE//YYYYMMDD
:98A::MEET//YYYYMMDD
:98A::RDTE//YYYYMMDD
:16S:CADETL
:16R:CAOPTN
:13A::CAON//001
:22F::CAOP//SECU
:17B::DFLT//Y
:16R:SECMOVE
:22H::CRDB//CRED
:22H::TXAP//TXBL
:35B:ISIN XX0000012345
DEF SHARES
:36B::ENTL//UNIT/5000,
:92D::ADEX//1,/2,
:98A::PAYD//YYYYMMDD
:98A::AVAL//YYYYMMDD
:16S:SECMOVE
:16S:CAOPTN
Seq.
Tag
Qualifier
Decision Date
Implement. Date
E1/E
2
22H
TXAP
Aug-2011
Nov-2012
Update Date
Open Item Ref.
SR2012 CR
3.14 Movement Sequence Usage in the MT564
All prices and rates are to be included at the relevant movement level (E1/E2), not the option level (E). The
only exception to this rule is when there will be no corresponding movement for the rate/price, at any time in
the event. In this case, the rate/price can be included in E. If the rate/price cannot be included in E due to
standards reasons, it must be included in narrative.
When multiple prices/fees and rates are announced for an option, each should be specified within its own
movement sequence. An exception is use of GRSS and NETT, and the applicable tax rates (eg. TAXR), when
several rates can be included in the same movement sequence.
The MT564 should accurately reflect the projected movements on the cash/securities account, per option. If an
option is included in the MT564 with two cash movements and one securities movement, the MT566 sent for
that option should also include two cash movements and one securities movement. (Please note that these
movements can be sent in separate MT566.) See also 5.10.
MT564 Tender offer with Early solicitation fee and cash incentive (consent fee)
:16R:GENL
SR2012 V1.0
Page 30
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
:20C::CORP//123456789123456
:20C::SEME//11111111111111
:23G:RMDR
:22F::CAEV//TEND
:22F::CAMV//VOLU
:98C::PREP//20111112010343
:25D::PROC//COMP
:16S:GENL
:16R:USECU
:35B:ISIN XX
:16S:USECU
:16R:CAOPTN
:13A::CAON//001
:22F::CAOP//CASH
:17B::DFLT//N
:98A::EXPI//20111117
:98C::RDDT//20111102160000
:69A::PWAL//20111020/20111117
:16R:SECMOVE
:22H::CRDB//DEBT
:35B:ISIN XX
:98A::PAYD//20111107
:16S:SECMOVE
:16R:CASHMOVE
:22H::CRDB//CRED
:98A::PAYD//20111107
:90B::OFFR//ACTU/EUR0,59342
:16S:CASHMOVE
:16R:CASHMOVE
:22H::CRDB//CRED
:98A::PAYD//20111107
:92F::ESOF//EUR0,030
(early solicitation fee)
:16S:CASHMOVE
:16R:CASHMOVE
:22H::CRDB//CRED
:98A::PAYD//20111107
:92A::INCE//EUR0,001
(consent fee)
:16S:CASHMOVE
:16S:CAOPTN
:16R:CAOPTN
:13A::CAON//002
:22F::CAOP//CASH
:17B::DFLT//N
:98A::EXPI//20111117
:98C::RDDT//20111117160000
:69A::PWAL//20111020/20111117
:16R:SECMOVE
:22H::CRDB//DEBT
:35B:ISIN XX
:98A::PAYD//20111107
:16S:SECMOVE
:16R:CASHMOVE
:22H::CRDB//CRED
:98A::PAYD//20111107
:90B::OFFR//ACTU/EUR0,56251
:16S:CASHMOVE
:16R:CASHMOVE
:22H::CRDB//CRED
SR2012 V1.0
Page 31
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
:98A::PAYD//20111107
:92A::INCE//EUR0,001
:16S:CASHMOVE
:16S:CAOPTN
3.143.15
(consent fee)
Usage Guidelines for Narratives in the MT 564 & MT 568
Field 70a (narrative) may be considered as a barrier to automation.
However, the narrative field itself is not unstructured. The field 70a is qualified (using a qualifier) and this gives
some structure to the narrative and the corporate actions announcement message itself.
Based on the type of narrative (defined by the qualifier), one can define whether the field can be ignored the
information, map it somewhere else, read by a human being as its content is critical.
Therefore, the MT 564 with field 70 is not be a barrier to STP provided that everyone understands how the
qualifiers are used in this context and use it the same way.
The usage of the various types of narratives fields should follow the following guidelines:
3.14.13.15.1 Additional Text (ADTX)
This qualifier should be used when some details on the Corporate Action event can not be included within the
structured fields of this message. The information is to be read by the receiver as it is information is not
somewhere else in the message.
It should be made clear to everybody that if there is a way to provide this information in a structured field, it
MUST be provided in a structured field and NOT be given in the additional text narrative.
Although this field is repetitive in certain cases, it must not be over-used. Should there be a lot of narrative
information required in addition to the structured ones, the MT 568 is to be used.
3.14.23.15.2 Narrative Version (TXNR)
This qualifier should be used to reiterate some information that has already been included within structured
fields of this message.
In no circumstances, must this field be used to communicate additional information.
It should be made clear that only information present in a structured field should be present after TXNR, not
ADTX type of information. A receiver must be confident that they can completely ignore this type of narrative
without impacting on the legality or completeness of the Corporate Action event.
If this rule is followed, an institution that has captured automatically all the structured information of the
message may ignore completely this field.
3.14.33.15.3 Information Conditions (INCO)
Information conditional to the whole Corporate Action, for example, an offer is subject to 50% acceptance.
Due to the very nature of conditions, it may require some narrative to unambiguously detail the conditions.
This information is important and needs to be read by the receiver.
3.14.43.15.4 Information to be complied with (COMP)
Information conditional to the account owner and which must be complied with. For example, not open to US
residents, QIB or SIL to be provided.
Due to the very nature of conditions, it may require some narrative to unambiguously detail the conditions.
This information is important and needs to be read by the receiver.
3.14.53.15.5 Offeror (OFFO)
The Offeror/Acquiring Company is the entity making the offer and is different from the issuing company. This
should provide details of the offeror‟s offer.
SR2012 V1.0
Page 32
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
In many circumstances, there is no standards identification of the offeror. Therefore, this narrative allows to
properly cater for that information without mixing it with other type of narrative.
The fact that there is no standards identification of the offeror does not prevent the receiver to map that
information internally for further processing.
3.14.63.15.6 Security Restriction (NSER)
Restriction on a new security.
When a new security is issued due to a corporate actions event, some restrictions may be attached to it (e.g.
can not be sold for a given period of time).
The security identifier may not be sufficient to derive that information. Therefore, this narrative allows to
properly cater for that information without mixing it with other type of narrative.
3.14.73.15.7 Declaration Details (DECL)
Details concerning the beneficial owner not included within structured fields of this message
In some circumstances, there is no standards identification of the beneficial owner. Therefore, this narrative
allows to properly cater for that information without mixing it with other type of narrative.
The fact that there is no standards identification of the offeror does not prevent the receiver to map that
information internally for further processing.
3.14.83.15.8 Party Contact Narrative (PACO)
This field must contain the contact details of some party. A typical example is the contact details of the person
who wrote/generated the message and from whom more info is available. This information is typically
unstructured.
The received may or may not read systematically this information if received based on its own process and
requirements.
3.14.93.15.9 Registration Details (REGI)
Details concerning the registration of the securities that not included within structured fields of this message
When the identification of the financial instrument and/or the account is not sufficient to define this information,
it may be given using this field.
3.14.103.15.10 Registration Details (WEBB)
The web address where additional information on the event can be found. It is not the general web site address
of the company involved in the event.
3.14.113.15.11 Taxation Conditions (TAXE)
Details on taxation conditions that cannot be included within the structured fields of this message.
3.14.123.15.12 Disclaimer (DISC)
Disclaimer relative to the information provided in the message. It may be ignored for automated processing.
3.14.133.15.13 Name (NAME)
Provides the new name of a company following a name change.
3.14.143.15.14 Basket or Index Information (BAIN)
Provides additional information on the basket or index underlying a security, for example a warrant..
3.14.153.15.15 Additional narrative remarks
Each narrative field has its own use and any information must go in the relevant narrative should there be a
need to use a narrative. As a general rule, the same information should not be found in more than one
narrative type field.
SR2012 V1.0
Page 33
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
So, to what extent should field 70 in the MT 564 be used?
This field :70E:: is limited to 10 lines of 35x (it is repetitive in some Corporate Action and is not in others).
SWIFTStandards‟ position is that for any specific type of narrative, if it exceeds those 10 lines of 35x, the
sender should use an MT 568. This message is intended for big narrative, complicated Corporate Action
events or for Proxy Voting information such as the Agenda of a meeting. SWIFT states that if the intention is
just to repeat with words what is in the MT 564, an MT 568 is really the message for that.
3.16 Reminder
The following are some guidelines on the ability to send reminder messages to customers who have not
instructed fully on their eligible balance for the corporate action event before the deadline.
This flow is strictly between the account servicer and account owner who has not responded and would occur
just prior to the close of an offer. This flow would only be sent in the event no election response was received
or if a partial election response was received. This flow is optional and usage/timing is left to SLA.
If sent, it must be an MT 564 bearing the RMDR function.
Uninstructed balance will inform the account owner on the quantities for which no instruction was received.
UNBA
Uninstructed Balance
Balance of uninstructed position.
INBA
Instructed Balance
Balance of instructed position.
Seq.
Tag
B2
93
SR2012 V1.0
Qualifier
Decision Date
Implement. Date
UNBA-INBA
JAN 2002
NOV-2002
Page 34
Update Date
Open Item Ref.
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4 Movement Preliminary Advice Message (MT 564 – ADDB//CAPA)
4.1
Introduction
This section provides more detailed usage rules and business flows for the movement preliminary advice and
preliminary advice cancellation processes (i.e. for the MT 564 having 22F:ADDB//CAPA in sequence D in
ISO15022 and for respectively the seev.035 and seev.044).
4.2
Business Need
Corporate Action Movement Preliminary Advice messaging addresses three key business needs:
1.
Facilitate automated payment processing and payment management: The CA Movement Preliminary
Advice is the building block for payment automation, it will allow for the message to interface
automatically into payment processing systems and identify pre-matching of payments which will result
in increased payment STP.
2.
Increase efficiency: Custodians and clients could benefit from a CA Movement Preliminary Advice
message that confirms payment details. The CA Movement Preliminary Advice message will report all
critical details of corporate action payments at the account level within structured tags incorporating tax
treatment information, rates, commissions, and fees. The CA Movement Preliminary Advice message
can be linked to the CA Movement Confirmation message and achieve reconciliation at the account, tax
profile, and specific transaction level.
3.
Reduce Operational Risk: In ISO 15022, the practice of using MT564 for announcement of updated
event details commingled with Movement Preliminary Advice of payment details is problematic. From
an Event Management perspective, critical updates of event details could be missed if the MT564 is
perceived to be sent for final entitlement and/or cash reconciliation purposes. Similarly, the client could
potentially miss Movement Preliminary Advice details needed to facilitate cash projections if the MT564
is perceived to be for event or entitlement update details.
4.3
Usage Rules
The CA Movement Preliminary Advice message is an optional message within the Corporate Action message
flow and can be used for actions in all event categories; Mandatory, Mandatory with Election, and Voluntary
events.
4.3.1 Mandatory Events
The CA Movement Preliminary Advice can be sent for credit/debit of cash and/or securities. It would be
triggered prior to the payment date of the event and may or may not follow an ISO 20022 CA Notification
message.
Some common examples of cases where the CA Movement Preliminary Advice would be used include
Mandatory Income as well as Mandatory Capital events such as: Cash Dividends, Interest Payments, Maturity
Payments / Final Redemptions, Partial Redemptions, CMO Payments, Stock Dividends, Stock Splits/Reverse
Splits, Return of Capital, Merger (the list is not exhaustive).
CA Movement Preliminary advice can be sent as a stand alone message (i.e. not linked to a CA Notification)
only in the case of predictable events (Interest payment, maturity payment,…).
4.3.2 Mandatory with Election and Voluntary Events
ISO 20022 CA Movement Preliminary Advice can be sent as the communication method for Final Entitlement
replacing the CA Notification message for this purpose. The CA Movement Preliminary Advice for Mandatory
with Election and Voluntary events can be sent for credit/debit of cash and/or securities upon confirmation of
the instruction. This is consistent with the current market practice of final entitlement.
SR2012 V1.0
Page 35
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
The Movement Preliminary Advice is formatted with all the movements associated with the option, even though
more than one final confirmation of payment message may have to be sent depending on posting dates.
For instance, in the case of a Rights Issue where the Exercise option is elected, the Movement Preliminary
Advice will identify the following movements; Cash Debit Movement, Share Credit Movement, and Share Debit
Movement.
However, several final payment confirmations (in an ISO 20022 CA Confirmation messages) may have to be
sent as the payment dates may be different for each movement.
4.3.3 Replacement Preliminary Movement Advice
In the case where resulting entitlement is updated, and a Movement Preliminary Advice has been sent to the
account owner, it is recommended that a replacement Movement Preliminary Advice be triggered upon
recalculation of the entitlement as long as cash and/or securities have not been posted to the clients account.
Examples:
Critical data element has changed at the event level which affects the resulting cash and/or
securities entitlement.
Regarding Final Entitlement, when an offer is pro-rated – At this point the resulting
entitlement has been recalculated as a critical data element has changed at the offer level.
The account owner is pre-advised of the new cash and/or securities movements.
4.3.4 Cancellation of a Preliminary Movement Advice
When an election instruction is cancelled - At this point the resulting entitlement has been
recalculated to zero and the service provider may send a cancellation of the Movement
Preliminary Advice to convey that the movements have been taken down.
A Movement Preliminary Advice can be sent to pre-advise of a reversal of corporate action
cash or securities postings. If the CA Confirmation Reversal does not finally take place, this
pre-advice of movement reversal may be cancelled by the account servicer.
4.4
Business Scenarios
Scope
The following 13 scenarii are to be considered as examples illustrating how a Corporate Action Movement
Preliminary Advice fits in to the Corporate Action message flow for actions within each event category.
Since a lot of aspects of the message flows may be governed by specific service level agreements defined
between counterparties, these diagrams cannot and do not intend to reflect all the possible cases of message
flows. They usually illustrate the plain vanilla scenario within each category and therefore are to be used only
as a guidance for implementers.
Conventions used in flow diagrams
The message flow diagrams are colour coded for ease of reference with the following conventions:
Black = Mandatory message flow
Blue = Optional message flow
Orange = Movement Preliminary Advice and Cancellation Advice message flow
Message or fields
Abbreviated Name
Message name
MT 564
ISO 15022 Corporate Action Notification message
MT 565
ISO 15022 Corporate Action Instruction message
MT 566
ISO 15022 Corporate Action Confirmation message
MT 567
ISO 15022 Corporate Action Status and Processing Advice message
23G::NEWM
ISO 15022 Function of the Message field with value “New” message
23G::REPE
ISO 15022 Function of the Message field with value “Eligible Balance Notification” message
SR2012 V1.0
Page 36
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Message or fields
Abbreviated Name
Message name
23G::REPL
ISO 15022 Function of the Message field with value “Replacement” message
25D::PROC//PREC
ISO 15022 Processing Status field with value “Preliminary Announcement Confirmed”
25D::PROC//COMP
ISO 15022 Processing Status field with value “Complete”
25D::IPRC//PACK
ISO 15022 Status Code field with status value “Instruction Processing Status
Acknowledge/Accepted”
CANO
ISO 20022 Corporate Action Notification message (seev.031)
CAPS
ISO 20022 Corporate Action Event Processing Status Advice message (seev.032)
CAIN
ISO 20022 Corporate Action Instruction message (seev.033)
CAIS
ISO 20022 Corporate Action Instruction Status Advice message (seev.034)
CAPA
ISO 20022 Corporate Action Movement Preliminary Advice message (seev.035)
CACO
ISO 20022 Corporate Action Movement Confirmation message (seev.036)
CARE
ISO 20022 Corporate Action Movement Reversal Advice message (seev.037)
CANA
ISO 20022 Corporate Action Narrative message (seev.038)
CACN
ISO 20022 Corporate Action Cancellation Advice message (seev.039)
CAIC
ISO 20022 Corporate Action Instruction Cancellation Request message (seev.040)
CACS
ISO 20022 Corporate Action Instruction Cancellation Request Status Advice message
(seev.041)
CAST
ISO 20022 Corporate Action Instruction Statement Report message (seev.042)
CAPC
ISO 20022 Corporate Action Movement Preliminary Advice Cancellation Advice message
(seev.044)
SR2012 V1.0
Page 37
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.1 Scenario 1: Mandatory Event – No preliminary Advice
This scenario illustrates, using a ISO 150022 notation, a classic business flow for mandatory corporate action
events when a preliminary advice flow is not explicitly supported.
MT564
23G::NEWM
25D::PREC
MT564
23G::REPE or
REPL
25D::COMP
M
e
s
s
a
g
e
A) Preliminary Announcement
confirmed sent prior to Ex Date
B) Confirmed Announcement sent on Ex Date
Final Entitlement
(for illustrative purposes only)
MT566
23G::NEWM
cash and/or
securities
movement block
present
SR2012 V1.0
C) Confirmation of Payment sent on Pay Date
G
a
t
e
w
a
y
Event Management Process
A) Preliminary
Announcement
B) Confirmed
Announcement
C) Confirmation
of Payment
Page 38
No automated solution to
Identify MT564 as “Final
Entitlement” Message.
Manual intervention required
for pre-payment reconciliation
Payment Management
Process
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.2 Scenario 2: Mandatory with Election and Voluntary Event - No Preliminary Advice
This scenario illustrates, using a ISO 150022 notation, a classic business flow for mandatory corporate action
events with election or voluntary corporate action events when a preliminary advice flow is not explicitly
supported.
MT564
23G::NEWM
25D::PROC//
PREC
MT564
23G::REPE or
REPL
25D::PROC//
COMP
M
e
s
s
a
g
e
B) Confirmed Announcement
sent on Ex Date
(for illustrative purposes only)
C) New instruction
MT567
23G::INST
25D::IPRC//PACK
MT564
23G::REPE or
REPL
25D::PROC//
COMP
D) Confirm of Instruction
E) Confirmed Announcement sent on Ex Date
Final Entitlement
(for illustrative purposes only)
MT566
23G::NEWM
cash and/or
securities
movement block
present
SR2012 V1.0
A) Preliminary
Announcement
confirmed
A) Preliminary Announcement
confirmed sent prior to Ex Date
F) Confirmation of Payment sent on Pay Date
Page 39
G
a
t
e
w
a
y
Event Management Process
B) Confirmed
Announcement
Response Management
System
MT565
23G::NEWM
D) Confirm of
Instruction
Inbound MT567
“matches” with
MT565
E) Confirmed
Announcement
No automated solution to
Identify MT564 as “Final
Entitlement” Message.
Manual intervention
required for pre-payment
reconciliation
F) Confirmation
of Payment
Payment Management
Process
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.3 Scenario 3: Mandatory Event Ex Date = Pay Date
The account servicer announces a mandatory event with a payment date on the same day as the ex-date. A
CA Movement Preliminary Advice is sent prior to ex-date and payment date.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
CAPA
Cash and/or
securities
movement block
present
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
B) Movement Preliminary Advice sent prior to
Ex Date and Pay Date
C) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
CACO
NEWM
cash and/or securities
movement block
D) Confirmation of Payment sent on Pay Date
present
SR2012 V1.0
A)
M
e
s
s
a
g
e
G
a
t
e
w
a
y
Page 40
Event Management
Process
C)
B)
Payment Management
Process
D)
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.4 Scenario 4: Mandatory Event
The account servicer announces a mandatory event. A CA Movement Preliminary Advice is sent prior to
payment date.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
CAPA
Cash and/or
securities
movement block
present
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
C) Movement Preliminary Advice sent prior to
Pay Date
CACO
NEWM
cash and/or securities
movement block
D) Confirmation of Payment sent on Pay Date
present
SR2012 V1.0
A)
M
e
s
s
a
g
e
G
a
t
e
w
a
y
Page 41
Event Management
Process
B)
C)
Payment Management
Process
D)
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.5 Scenario 5: Mandatory Event with Reversal of Payment
The account servicer announces a mandatory event. A CA Movement Preliminary Advice is sent prior to
payment date. Following confirmation of the payment, a reversal needs to be made for which a CA Movement
Preliminary Advice of reversal is made prior to the effective reversal of payment.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
CAPA
Cash and/or
securities
movement block
present
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
CARE
NEWM
cash and/or securities
movement block
present
Event Management
Process
B)
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
C) Movement Preliminary Advice sent prior to
Pay Date
CACO
NEWM
cash and/or securities
D) Confirmation of Payment sent on Pay Date
movement block
present
CAPA
Reversal
Cash and/or
securities
movement block
present
A)
E) Movement Preliminary Advice of reversal
sent after Pay Date
M
e
s
s
a
g
e
G
a
t
e
w
a
y
C)
D)
Payment Management
Process
E)
F)
F) Reversal of Payment
CAPA and CACO Movements usage guidelines
Movements reported within the CA movement preliminary advice reversal (CAPA reversal) message will be
opposite to those reported into the referred CA confirmation message (CACO) i.e. credit of cash and/or
securities will become debits and inversely.
Movements reported within the CA Reversal (CARE) message will be identical to the movements reported into
the referred CA confirmation message (CACO).
Note
SR2012 V1.0
If a rebook follows a reversal, it is recommended that the rebook be considered a new
payment. Therefore subject to the pre-advice process if it meets the criteria agreed upon
between the account servicer and the account provider.
Page 42
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.6 Scenario 6: Mandatory Event with Cancelled Reversal of Payment
The account servicer announces a mandatory event. A CA Movement Preliminary Advice is sent prior to
payment date. Following confirmation of the payment, a reversal needs to be made for which a CA Movement
Preliminary Advice of reversal is sent. This CA Movement Preliminary Advice of reversal is eventually
cancelled.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
CAPA
Cash and/or
securities
movement block
present
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
CAPC
Cancellation of CAPA
Reversal
SR2012 V1.0
Event Management
Process
B)
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
C) Movement Preliminary Advice sent prior to
Pay Date
CACO
NEWM
cash and/or securities
movement block
D) Confirmation of Payment sent on Pay Date
present
CAPA
Reversal
Cash and/or
securities
movement block
present
A)
E) Movement Preliminary Advice of reversal
sent after Pay Date
M
e
s
s
a
g
e
G
a
t
e
w
a
y
C)
D)
Payment Management
Process
E)
F)
F) Movement Preliminary Advice
Cancellation Advice
Page 43
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.7 Scenario 7: Mandatory Event with Critical Update
The account servicer announces a mandatory event. A CA Movement Preliminary Advice is sent prior to
payment date. Following this advice, a critical update is sent by the account servicer, followed by an updated
CA Movement Preliminary Advice.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
CAPA
Cash and/or
securities
movement block
present
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
CAPA
Replacement
Cash and/or
securities
movement block
present
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
A)
Event Management
Process
B)
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
C) Movement Preliminary Advice sent prior to
Pay Date
D) Replacement announcement for
Critical update eg. rate change
M
e
s
s
a
g
e
G
a
t
e
w
a
y
E) Replacement of the Preliminary Movement
Advice sent prior to Pay Date
D)
C)
E)
Payment Management
Process
F)
(for illustrative purposes only)
CACO
NEWM
cash and/or securities
movement block
present
SR2012 V1.0
F) Confirmation of Payment sent on Pay Date
Page 44
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.8 Scenario 8: Mandatory with Election and Voluntary Event - New Instruction
The account servicer announces a mandatory with election or a voluntary event. A CA Movement Preliminary
Advice is sent to the account owner after receipt of his corporate action instruction.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
A) & B)
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
C) New instruction
CAIS
Accepted instruction
D) Instruction Status
CAPA
Cash and/or
securities
movement block
present
E) Final Entitlement Preliminary movement
advice sent upon confirm of instruction
* NOTE:
M
e
s
s
a
g
e
Event Management Process
CAIN
D)
G
a
t
e
w
a
y
Response Management
Process
E)
CACO
NEWM
cash and/or securities
movement block
present
Payment Management
Process
F) Confirmation of Payment sent on Pay Date
F)
* If an offer is pro-rated after expiration date and prior to
payment, a Preliminary movement Advice replacement may
be sent upon recalculation of entitlement
SR2012 V1.0
Page 45
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.9 Scenario 9: Mandatory with Election Event - Cancel Instruction
The account servicer announces a mandatory with election or a voluntary event. A CA Movement Preliminary
Advice is sent to the account owner after receipt of his corporate action instruction. The account owner
subsequently cancels his corporate action instruction. The acceptance of the corporate action instruction
cancellation by the account servicer is followed by the sending of a CA Movement Preliminary Advice
Cancellation Advice. After the instruction deadline, a CA Movement Preliminary Advice is sent to the account
owner followed by a CA Movement Confirmation.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
Event Management
Process
A) & B)
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
CAIN
C) New instruction
CAIS
Accepted instruction
D) Confirm of Instruction
CAPA
Cash and/or
securities
movement block
present
E) Final Entitlement Preliminary movement advice
sent upon confirm of instruction
F) Instruction Cancellation Request
CACS
Accepted cancellation
request
CAPC
Cancellation of
CAPA
G)
Instruction status
H) Movement Preliminary Advice cancellation
Deadline
CAIS
Processing status:
Default Action
CAPA
Cash and/or
securities
movement block
present
D)
M
e
s
s
a
g
e
CAIC
Response Management
Process
G)
G
a
t
e
w
a
y
I) Instruction Status sent upon
application of default instruction
I)
E)
J) Replacement Final Entitlement Preliminary
movement advice sent upon confirm of instruction
H)
CACO
NEWM
cash and/or securities
movement block
present
Payment Management
Process
K) Confirm of Payment
J)
K)
SR2012 V1.0
Page 46
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.10 Scenario 10: Mandatory with Election – No Instruction Received
The account servicer announces a mandatory with election event . The account owner does provide corporate
action instructions therefore (depending on the type of service provided) the account owner sends either a CA
Notification with function Reminder. After the deadline the account servicer sends a CA Instruction Status
Advice to advice the account owner that the default instruction has been applied to his holdings. A CA
Movement Preliminary Advice is finally sent to the account owner followed by a CA Movement Confirmation.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
A) & B)
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
CANO
RMDR
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
C) Reminder of event details and uninstructed/
instructed balance or response status sent prior to
deadline
Deadline
CAIS
Processing status:
Default Action
CAPA
Cash and/or
securities
movement block
present
Event Management
Process
M
e
s
s
a
g
e
G
a
t
e
w
a
y
D) Instruction Status sent upon
application of default instruction
E) Final Entitlement Preliminary
movement advice sent upon confirm of instruction
C)
Response Management
Process
D)
E)
Payment Management
Process
CACO
NEWM
cash and/or securities
movement block
present
SR2012 V1.0
F) Confirm of Payment
F)
Page 47
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.11 Scenario 11: Voluntary Event – Cancel and Rebook Instruction
The account servicer announces a voluntary event. The account servicer sends a CA Movement Preliminary
Advice message to the account owner following the receipt of his corporate action instruction. The account
owner cancels his corporate action instruction. The account servicer then cancels the sent CA Movement
Preliminary Advice message and sends a new CA Movement Preliminary Advice message following the receipt
of the new corporate action instruction from the account owner.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
Event Management
Process
A) & B)
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
CAIN
C) New instruction
CAIS
Accepted instruction
D)
CAPA
Cash and/or
securities
movement block
present
D)
Instruction status
E) Final Entitlement Preliminary movement advice
sent upon confirm of instruction
F) Instruction Cancellation Request
CACS
Accepted cancellation
request
CAPC
Cancellation of
CAPA
G)
Instruction status
H) Movement Preliminary Advice cancellation
I) New instruction
CAIS
Accepted instruction
J)
M
e
s
s
a
g
e
G
a
t
e
w
a
y
CAIC
Response Management
Process
G)
CAIN
J)
instruction Status
Deadline
CAPA
Cash and/or
securities
movement block
present
E)
K) Final Entitlement Preliminary
movement advice sent upon confirm of instruction
H)
CACO
NEWM
cash and/or securities
movement block
present
Payment Management
Process
L) Confirm of Payment
K)
L)
SR2012 V1.0
Page 48
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.12 Scenario 12: Voluntary Event – Partial Election
The account servicer announces a voluntary event for which two consecutive partial corporate action
instructions are received from the account owner. The account servicer send a CA Movement Preliminary
Advice following each corporate action instruction received.
Account Servicer
CANO
NEWM
ConfirmedIncomplete
Account Owner
A) Preliminary Announcement
confirmed sent prior to Ex Date
Event Management
Process
A) & B)
CANO
REPL
Balance only or
Balance & Entl
Confirmed-Complete
B) Confirmed Announcement sent on Ex Date
(for illustrative purposes only)
C) New instruction
CAIS
Accepted instruction
D) Instruction status
CAPA
Cash and/or
securities
movement block
present
E) Final Entitlement Preliminary movement advice
sent upon confirm of instruction
G
a
t
e
w
a
y
F) New instruction
CAIS
Accepted instruction
G) instruction status
Deadline
CAPA
Replacement
Cash and/or
securities
movement block
present
M
e
s
s
a
g
e
CAIN
Partial
election
D)
Response Management
Process
CAIN
remaining
election
(same option)
G)
E)
H) Replacement of the Preliminary Movement
Advice sent prior to Pay Date
H)
CACO
NEWM
cash and/or securities
movement block
present
Note
SR2012 V1.0
Payment Management
Process
I) Confirm of Payment
I)
Regarding split elections between options, it is understood that since one CA Confirmation
is sent per elected option, a separate CA Movement Preliminary Advice message will be
sent for each option elected.
Page 49
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
4.4.13 Scenario 13: Movement Preliminary Advice for Market Claim & Compensation and Tax
Refund
A. Market Claim & Compensation
Account Servicer
CAPA
Market Claim &
Compensation
CAPA
Replacement
Market Claim &
Compensation
Account Owner
M
e
s
s
a
g
e
A) Movement Preliminary Advice sent
B) Movement Preliminary Advice replacementsent
CACO
NEWM
cash and/or securities
movement block
present
D) Confirm of Payment
G
a
t
e
w
a
y
A)
Payment Management
Process
B)
D)
B. Tax Refund
Account Servicer
Account Owner
M
e
s
s
a
g
e
CAPA
Tax Refund
A) Movement Preliminary Advice sent
CAPA
Replacement
Tax Refund
CACO
NEWM
cash and/or securities
movement block
present
SR2012 V1.0
B) Movement Preliminary Advice replacementsent
D) Confirm of Payment
G
a
t
e
w
a
y
Page 50
A)
Payment Management
Process
B)
D)
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
C. Movement Preliminary Advice Cancellation for Market Claim & Compensation
Account Servicer
CAPA
Market Claim &
Compensation
CAPC
Cancellation of CAPA
Market Claim &
Compensation
Account Owner
M
e
s
s
a
g
e
A) Movement Preliminary Advice sent
B) Movement Preliminary Advice cancellation sent
G
a
t
e
w
a
y
A)
Payment Management
Process
B)
D. Movement Preliminary Advice Cancellation for Tax Refund
Account Servicer
Account Owner
M
e
s
s
a
g
e
CAPA
Tax Refund
A) Movement Preliminary Advice sent
CAPC
Cancellation of CAPA
Tax Refund
SR2012 V1.0
B) Movement Preliminary Advice cancellation sent
G
a
t
e
w
a
y
Page 51
A)
Payment Management
Process
B)
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
5 Instruction Message (MT 565)
The MT 565 contains the sequence D - which is not repetitive as the rule is one instruction per option.
However, the sequence B - account - is repetitive.
Given the structure of the message itself, it is possible to include multiple safekeeping accounts and elected
balances within the same MT565 message for a given option, as the safekeeping account and balance section
of the message is repetitive. To insure clear and unambiguous messages, however, market practice requires
that an MT565 message should contain reference to only one safekeeping account and elected balance for
that same account.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
B2
97a
SAFE
JUN-2001
NOV-2002
Update Date
Open Item Ref.
Usually, linking MT 565 together should not been done, unless it makes sense for special event/options (e.g.
linking the MT 565 with BUYA and the MT 565 with SECU that includes the extra securities bought for the
exercise).
It is to be noted that it is against market practice and ISO 15022 standards to use an MT 568 alone to instruct a
corporate action. MT 568 should only be used in the instruction process to provide additional complex
1
information to what has been instructed in an MT 565.
5.1
Identification of option selected on an Election2.
If the MT 565 is a response to an MT 564, the option number and option code should be one of those
announced in the related MT 564. If a mismatch occurs between the MT 565 and the MT 564, the MT 565
should be rejected.
When the MT 565 is unsolicited, i.e., the instruction has not been preceded by an MT 564 Corporate Action
Notification, then the corporate action option number must be UNS, i.e., :13A::CAON//UNS.
In the MT 565 replying to the notification MT 564, the minimum details to be provided are the mandatory MT
565 fields:
- Corporate action event reference number. As with all messages in the corporate action it is important for
reconciliation purposed to include the correct corporate action number.
- A message reference number for the instruction.
- Function of message. An indication that this is an election.
- Corporate action event indicator. (CS comment: Is this still necessary ?)
- Links to the announcement or entitlement message
- The corporate action underlying instrument identified by its ISIN.
- Account Information. This could be for a single account or all accounts.
- Eligible Balance. The total amount of client stock that could be elected upon, regardless of whether any
elections have already taken place. This is not the number of shares the election is made for.
- The option number relating to the required option.
- The option code (e.g. cash and / or stock).
- Quantity of election. This is the number of eligible securities to be elected upon or, if applicable, the
number of securities to be received.
Use of other details is dependent on SLA.
5.2
Usage of option code BUYA
5.2.1 When to use BUYA?
1
2
Brussels meeting June 2003.
Geneva meeting September 2002 and Brussels meeting June 2003.
SR2012 V1.0
Page 52
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
BUYA should be used when additional securities have to be bought. This option only pertains to this action, not
to the exercise of the additional securities bought. This means that an SECU (exercise) instruction should
follow to exercise.
Seq.
E
Tag
22F
Qualifier
CAOP//BUYA
Decision Date
Implement. Date
JUN-2001
NOV-2002
Update Date
Open Item Ref.
5.2.2 One or two SECU in case BUYA is used ?
Let's imagine an option with a ratio of 10 old for 1 new. If the holding is 7 and 3 needs to be bought, then the
following should be sent:
BUYA 3
SECU 10
Open question: should it be in one or two MT 565 and should the MT 565 of SECU be conditional upon the
acceptance and execution of the BUYA and if so, how to indicate and acknowledge this when it goes OK and
when no BUYA can be done after a while ?
Two Instructions. The Group agreed that it is not market practice to make the exercise instruction conditional
on another instruction (buy additional rights). A separate code was also requested if the round-up privilege is
guaranteed.
Seq.
Tag
Qualifier
E
5.3
Decision Date
Implement. Date
JAN-2002
NOV-2002
Update Date
Open Item Ref.
Clarification: QINS
In MT 565, is QINS referring to underlying for one event rights issue and to the rights for a two events rights
issues?
1
Agreement that:
- for one event rights issues QINS refers to the interim security;
- for two events rights issues QINS refers to the underlying security of the second event.
Seq.
5.4
Tag
Qualifier
Decision Date
Implement. Date
JAN-2002
NOV-2002
Update Date
Open Item Ref.
Instruction Cancellation
It is not always possible to cancel a CA instruction. When it is possible, it is then indicated in the MT 564
(Sequence E - Field :17B::WITH (Withdrawal Allowed Flag) or CHAN (Change Allowed flag) + usage rule: If
qualifiers CHAN or WTHD are used, then field :69a::REVO must be used in sequence E to indicate the period
during which the change or withdrawal of instruction is allowed).
If qualifier is WITH – client can only cancel his previously sent instruction (23G: CANC) and cannot
reinstruct.
If qualifier is CHAN – the client can cancel and send a new instruction.
Note also that in case of an election deadline extension, the account servicer may indicate in a replacement
MT 564 that all previously sent instructions are considered as invalid by using the “Previous Instructions
Invalidity Flag” in 22F::OPTF in the sequence E.
In the same case, the acccount servicer may also indicate in the Status message MT 567 by using the code
CSUB in 24B::CAND in sequence A2a that an Instruction has been cancelled by the agent due to an event
deadline extension.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
Update Date
Open Item Ref.
Nov. 2011
1
Toronto Meeting June 2002.
SR2012 V1.0
Page 53
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
5.5
Linking MT 565 and MT 568
1
The SMPG recommends not to link an MT565 to an MT568 , except in some cases like linking MT 565 and MT
568 for disclosure of beneficial owner details.
Vienna meeting September 2008.
SR2012 V1.0
Page 54
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
6 Confirmation Message (MT 566)
6.1
On the use of the message
MT 566 confirmation is mandatory for confirming events in which securities/cash movements occur.
MT 566 confirmation is not required when there are no outturn benefits (for example a name change with no
change of security identifier).
Seq.
6.2
Tag
Qualifier
Decision Date
Implement. Date
JUN-2002
MAY 2005
Update Date
Open Item Ref.
Update Date
Open Item Ref.
Linkage to Previous and Related Messages
References to any preceding MT 564 or MT 565 are optional in the MT 566.
Seq.
Tag
A1
22F
6.3
Qualifier
PREV / RELA
Decision Date
Implement. Date
APR 2006
NOV 2007
CA53
On the use of value date
Value date is recommended in MT 566 (even if the same as the payment date) for cash move.
6.4
Gross Amount
When the gross amount (GRSS) is equal to the posting amount (PSTA), then the gross amount may be
optional.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
D2
19B
GRSS
Nov 2005,
Affirmed Apr. 2006
NOV 2006
6.5
Update Date
Open Item Ref.
CA38
What if benefits are not distributed all at the same time?
Separate Confirmation messages may be sent if benefit is distributed for different components of the eligible
balance at different times, within the same day. If the distribution is made within different days, then separate
confirmation messages must be sent.
Each message should identify the type of balance for which the benefit is distributed (e.g lent balance…).
Some markets would like to breakdown the eligible balance on the Preliminary Notification message, this is
dependent on client agreement (and thus falls out of the scope of global market practice). – to be moved to the
MT564 section
Seq.
B
Tag
Qualifier
Decision Date
Implement. Date
93a
ELIG
Jun. 2001/Jan. 2002
NOV-2002
Update Date
Open Item Ref.
Eligible balance is optional in the MT 566, and a Confirmed balance type has been introduced to give the
balance on which the confirmation postings related to
e.g. Eligible balance on ex date: 500 ; Cash on 300 and Stock on 200.
Leading to one MT 566 confirming the credit based on the election of 300 (=confirmed balance) and one MT
566 confirming the securities posting based on the election of 200 shares. (=confirmed balance).
This "confirmed balance" is now mandatory in the MT566.
Seq.
B
Tag
Qualifier
Decision Date
Implement. Date
93a
CONB
JUN 2001
JUN 2002
SR2012 V1.0
Page 55
Update Date
Open Item Ref.
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
6.6
On usage of reversal in MT 566
In an MT 566, the usage of the reversal is as follows:
- the MT 566 with the function "reversal" should be exactly the same as the message it reverses.
For example an original MT 566 reported a credit of USD 100.00 with function NEWM. If this needs to be
reversed, the new MT 566 would have REVR as function of the message and still report a credit of USD
100.00. By virtue of the function of the message being a reversal it is known that the opposite is occurring.
The only difference vis-à-vis the original message could be the posting and the value date as well as the
preparation date. All other details should remain the same.
Seq.
A
Tag
23G
Qualifier
REVR
Decision Date
Implement. Date
Jun. 2001 / Jun. 2002
Update Date
Open Item Ref.
Nov. 2002
The reversal of an MT 566 should always be the same as the original as explained above. The
confirmation following the reversal will include the correct FX information (if it was the reason of the
reversal).
Seq.
A
Seq.
A
6.7
Tag
Qualifier
Decision Date
Implement. Date
Update Date
Open Item Ref.
23G
REVR
JUN 2003
MAY 2005
The same logic applies if the confirmation contains both multiple security and cash movements, only
one of which is the cause of the reversal. The reversal will be the same as the original and the
following confirmation will include the adjusted movements.
Tag
23G
Qualifier
Decision Date
REVR
JUN 2003
Implement. Date
Update Date
Open Item Ref.
Jun.2003/May2005
Following an MT 565 Formatted with „UNS‟ as Option Number
If an MT 565 is sent with the CA Option Number (CAON) as „UNS‟, should the resulting MT 566 use a number
or „UNS‟ in the CA Option Number field?
Both options are allowed under market practice:
The MT 566 CA option number may contain „UNS‟, or
The MT 566 CA option number may contain a number generated by account servicer upon receipt of the
MT 565 instruction.
Seq.
D
6.8
Tag
Qualifier
Decision Date
Implement. Date
13A
CAON
APRIL-2005
NOV-2006
Update Date
Open Item Ref.
Confirmation of sale of rights
It is to be noted that sale of rights may be instructed in several ways:
- The account owner may instruct the account servicer to execute the sale using an MT 565, then an MT 566
will be used to confirm the settlement of the sale.
- The account owner may take care himself of the sale (initiating 502 to a third party). Settlement instruction
could then be sent to the account servicer (as for a normal trade) and therefore, the confirm of the
settlement will be done using a settlement confirmation.
Open issue to discuss with SMPG: recommendation would be to send MT566, when rights sold in the context
of a CA event.
Seq.
Tag
Qualifier
Decision Date
June 2001
SR2012 V1.0
Implement. Date
Update Date
Open Item Ref.
Nov.2002
Page 56
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
6.9
Option Number for Credit of Rights in a Rights Issue Event (RHTS)
The option number to be used for the credit of the rights in the confirmation message (with SECU option code)
1
is 999.
6.10 Movement Sequence Usage in the MT566
The movement sequences (E1/E2) should reflect the movements posted on the cash and/or securities
account. The number of postings and the quantity/amount of each on the accounts are to correspond exactly
with the MT566 message/-s.
The MT566 should also correspond with the movements and information provided in the MT564; see section
3.14.
:16R:GENL
:20C::CORP//123456
:20C::SEME//444444444444
:23G:NEWM
:22F::CAEV//TEND
:98C::PREP//20111107000001
:16S:GENL
:16R:USECU
:97A::SAFE//123456
:35B:ISIN XX
93B::CONB//FAMT/3000,
:16S:USECU
:16R:CACONF
:13A::CAON//001
:22F::CAOP//CASH
:16R:CASHMOVE
:22H::CRDB//CRED
:97A::CASH//112233
:19B::PSTA//EUR1780.26
:98A::POST//20111107
:98A::VALU//20111107
90B::OFFR//ACTU/EUR0,59342
:16S:CASHMOVE
:16R:CASHMOVE
:22H::CRDB//CRED
:97A::CASH//112233
:19B::PSTA//EUR90
:98A::POST//20111107
:98A::VALU//20111107
:92F::ESOF//EUR0,030
(early solicitation fee)
:16S:CASHMOVE
:16R:CASHMOVE
:22H::CRDB//CRED
:97A::CASH//112233
:19B::PSTA//EUR 3
:98A::POST//20111107
:98A::VALU//20111107
:92A::INCE//EUR0,001
(consent fee)
:16S:CASHMOVE
:16S:CACONF
1
Conf call December 2005
SR2012 V1.0
Page 57
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Seq.
Tag
Qualifier
Decision Date
2011
SR2012 V1.0
Implement. Date
Update Date
Open Item Ref.
Nov-2012
Page 58
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
7 Status Message (MT 567)1
Seq.
-
Tag
Qualifier
Decision Date
Implement. Date
SEPT 2003
MAY 2005
Update Date
Open Item Ref.
The detailed recommendation on how to use the combination of status and reason codes can be found
within the final documents on www.smpg.info (SMPG CA Global Market Practice – Part 3 -MT 567
Decision Table, see introduction)
A flow has also been drawn to highlight the MT567 lifecycle. It can also be found on the web (CA SMPG
MT567 Decision Table Vn.n.pdf) – propose to include the flow here, instead of separate document.
-
7.1
General
The security identifier in the MT 567 status message is the UNDERLYING security.
Seq.
B
7.2
Tag
Qualifier
35B
Decision Date
Implement. Date
APRIL-2005
NOV-2006
Update Date
Open Item Ref.
Event Status
-
No reason code is required for Status:25D::EPRC//COMP and :25D::EPRC//RECD
The following codes are to be used with the event status:25D::EPRC//PEND:
 :24B::PEND//NPAY Payment Not Made - Payment has not been made by issuer.
 :24B::PEND//NSEC Securities Not Delivered - Securities have not been delivered by issuer
 :24B::PEND//NARR Narrative Reason.
 :24B::PEND//AUTH Sent to tax authorities, only with a tax reclaim event.
 :24B::PEND//VLDA Valid for tax authorities, only with a tax reclaim event.
[AUTH - Sent to Tax Authorities -- For tax reclaim, the event is pending because the reclaim is sent to the tax
authorities.]
[VLDA - Valid for Tax Authorities - For tax reclaim, the event is pending, the tax reclaim is valid for the tax
authorities.]
7.3
-
Instruction and Cancellation Status
Agreed that Function of Message INST (Instruction Status) can apply to both actual and default
instructions;
Status IPRC//STIN and IPRC//DFLA do not require reason codes;
Status IPRC//PACK used only if an instruction has been sent;
7.3.1 Related Reference in Instruction Status
An MT567 with Instruction Status must include a LINK sequence with the SEME reference of the instruction in
field :20C::RELA.
An MT567 with Cancellation Request Status must include a LINK sequence with the SEME reference of the
cancellation request in field :20C::RELA.
Seq.
A1
Tag
20C
Qualifier
RELA
Decision Date
Implement. Date
Sept-2011
Nov-2012
Update Date
Open Item Ref.
1
Geneva meeting September 2002, Luxembourg/Singapore meeting September/October 2003,Boston meeting
March 2004
SR2012 V1.0
Page 59
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
7.3.17.3.2 Reporting on Standing instructions and default actions
The account servicer may or may not send an unsolicited MT 567 to provide a status on the action taken for
any uninstructed balance based on the default action or a standing instruction. This is to be agreed in the SLA
(section 3.11.8.2).
7.4
Agreed Process Flow for IPRC (Instruction Processing Status)
At message level, either accept the instruction for further processing - IPRC//PACK (no reason required); or the
instruction is rejected by the network – no reject sent by user at message level.
At process level, either reject IPRC//REJT (as the instruction of the client is invalid), with a reason code;
or, depending on the service level agreement, indicate the instruction is pending IPRC//PACK or IPRC//PEND, with a
reason code, (instruction of the client is valid, however, the positions etc. have not yet been checked).
At process level and pending, eventually either reject IPRC//REJT (as the instruction of the client is invalid), with a reason
code;
7.5
Addition recommendations on specific MT 567 usage scenarios
7.5.1 Reporting on Standing Instructions and default actions
The account servicer may or may not send an unsolicited MT 567 to provide a status on the action taken for
any uninstructed balance based on the default action or a standing instruction. This is to be agreed in the SLA
(section 3.12.8.2).
7.5.2 Reporting of a Delayed Payment in the MT 567 section
When an announced payment does not happen on the specified date, an MT 567 should be sent (not a MT
566) with an appropriate status code such as NPAY (Payment Not Made - Payment has not been made by
issuer), or NSEC (Securities Not Delivered - Financial instruments have not been delivered by the issuer.).
Seq.
A2a
Tag
24B
SR2012 V1.0
Qualifier
PEND//NPAY
Decision Date
Implement. Date
JUN-2003
MAY 2005
Page 60
Update Date
Open Item Ref.
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8 Message Independent Market Practices
8.1
Official Corporate Action Event Reference (COAF)
8.1.1 Background
1
The Official Corporate Action Event Reference , COAF, was requested by the SMPG and implemented in
SR2008. The definition of COAF is „Official and unique reference assigned by the official central body entity
within each market at the beginning of a corporate action event.‟
The primary purpose of the COAF is to allow improved STP in the corporate actions instructions flow from
investors to their account servicers and further in the chain of intermediaries, by removing the current
requirement that each party in the chain instructs the next party with that party‟s CORP. Instead, all parties can
use the COAF in their instructions rather than the (changing) CORP.
A secondary purpose is to facilitate the reconciliation of announcements received from different sources for
the same event.”
However, untill the COAF has gained general acceptance and is widely implemented in corporate action
processing, there will be an interim period during which both CORP and COAF references will have to coexist
in the ISO 15022 and ISO 20022 CA messages. The following COAF principles are based and have to be
understood in the context of this coexistence premise.
8.1.2 Principles
8.1.2.1 COAF Algorithm
The COAF should be composed of a two parts; a COAF organisation identifier and the actual reference. The
organisation identifier specifies the official central body that assigned the COAF as per the issuer‟s request. It
is a 2 character alphanumeric code and the SMPG verifies that it is unique per organisation. The reference is
an alphanumeric code of up to 14 characters, and is unique per official central body.
A centralised list of COAF registration organisations and their identifiers is published by the SMPG and can be
found on the SMPG website.
8.1.2.2 Relationship between CORP and COAF
The Market Practice is to have a one-to-one relationship between CORP and COAF in the context of a bilateral
relationship account servicer/account owner, provided all principles are adhered to. Account servicers should
give a unique CORP to each event that has been given a unique COAF by the official body.
8.1.2.3 Assignment
a. The COAF should be assigned by the official source as soon as the event has been publicly
announced by the issuer (or its agent). The public announcement and assignment of COAF should
take place according to the applicable market rules, but by latest before the event has reached the
entitlement and/or instructions stage. When the COAF has been assigned, it must be relayed through
the processing chain to all market participants who should include it in their communications regarding
the event.
b. Not all events will receive COAFs, since not all events are officially announced eg. events well known
in advance such as fixed interest payment..
c. Notifications may and can be sent before a COAF is assigned.
d. The assignment of a COAF to a previously notified event should trigger an updated notification.
e. The COAF must be carried throughout the entire lifecycle of the CA event and in all CA messages.
1
In ISO15022 the COAF is provided into the :20C::COAF// field located into sequence A of all CA messages.
SR2012 V1.0
Page 61
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.1.2.4 Withdrawal and cancellation
If the issuer withdraws an event, the COAF is also withdrawn. If the issuer replaces the withdrawn event with a
new, a new COAF must be assigned to the new event.
If an account servicer, including the (I)CSD, cancels an event, the COAF is not cancelled. The account
servicer‟s new event, replacing the old event, should include the original COAF.
8.1.2.5 Corporate actions instructions
When a client of an account servicer creates and send a corporate action instruction to that account servicer,
the instruction must always contain the COAF if it has been assigned. The servicer provider‟s CORP value is
not mandatory when COAF is present. In that case, it is acceptable to use "NONREF" as the CORP value.
8.1.2.6 Multi-stage events
The Market Practice is to have one COAF per event, and not to have the same COAF for all events that are
linked together (or that the issuer considers as one event). Thus, for each separate processing stage/event,
there should be one unique COAF.
Example:
An issuer announces a rights issue, according to applicable law. For processing purposes, the CSD (or
exchange, as applicable) announces the event to its participants/members as two separate events; a
distribution of interim securities (CAEV RHDI) followed by a rights exercise (CAEV EXRI). Each of the
two events should be given its own unique COAF.
8.1.2.7 Multi-deposited securities
The Market Practice is to treat events for multi-deposited securities as separate events, one per place of
depository. This does not apply to Place of Trading.
Example:
An issuer announces a split in a security that is deposited on two different central securities depositories. The
split will be treated as two separate events, one per Place of depository, and each of the two events should be
given a unique COAF.
Seq.
Tag
A
8.2
20C
Qualifier
COAF
Decision Date
Implement. Date
April 2011
Nov. 2011
Update Date
Open Item Ref.
CA78.2
Placement Of Date, Period, Rates & Prices (DPRP) data elements
Formerly named “Sequence D versus E Guidelines”:
The general placement guidelines for the date, period, rates and price (DPRP) data elements available in the
D, E, E1, E1a and E2 sequences of the MT 564 and in the C, D, D1, D1a and D2 sequences of the MT 566
have all been implemented into the SR 2010 version of the ISO15022 standards.
Please refer to the Global Market Practice – Part 2 document published on the SMPG website, www.smpg.info
into the “Data Element Placement” section for a summary of the DPRP data elements placement as
implemented into the ISO 15022 Standards or to the ISO 15022 SWIFT SR2010 UHB itself.
All rates and prices should be included in the relevant SECMOVE / CASHMOVE sequences and not at option
level. The only exception to this rule is when there will be no corresponding movement for the rate/price, at any
time in the event. In this case, the rate/price can be included in E. If the rate/price cannot be included in E due
to standards reasons, it must be included in narrative.
Seq.
E/E1/
E2
Tag
92a
90a
SR2012 V1.0
Qualifier
Decision Date
Implement. Date
April 2011
Nov. 2011
Page 62
Update Date
Open Item Ref.
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.2.1 Presence of DPRP Elements per CAEV/CAMV Combination
The guidelines on the presence of specific date, period, rates and price (DPRP) data elements per type of
corporate action events (22F::CAEV) and Mandatory/Voluntary indicator (22F::CAMV) combinations are
provided into the Global Market Practice - Part 2 document published on the SMPG website, www.smpg.info
into the EIG+ (Event Interpretation Grid) section within the dedicated DPRP columns of that table.
Seq.
Tag
D, E,
E1&
E2
98a,
69a,
92a,
90a
Qualifier
Decision Date
Implement. Date
JUNE 2010
NOV-2010
Update Date
Open Item Ref.
CA06.7
CA158
/
8.2.2 Generic Cash Price Paid Per Product (PRPP) when No Cash Move is Present (SR2011)
Following the move of 90a::PRPP from sequence E to E2 in SR2011, a problems exists in SR2011 for events
that do not have a CASHMOVE sequence in which to include the price.
Therefore, the SMPG has decided to recommend the usage of the :90a::INDC (Indicative Price) in subsequence E1 from SR2011 to SR2012 should a PRPP price value be provided. The rationale for this decision
is that this will not increase the use of narrative, and the development necessary for the field in SR2012 is a
simple change of qualifier.
Seq.
E
Tag
Qualifier
Decision Date
Implement. Date
90a
PRPP
JUNE 2011
NOV-2011
Update Date
Open Item Ref.
CA 170
8.2.2 Usage of Withholding of Foreign Tax rate (92a::WITF) in MT 564 Sequence E (566 seq. D)
The usage of the Withholding of Foreign Tax rate in sequence E of the MT 564 (and in sequence D of the
MT566) is restricted to accumulating funds events in Germany.
Seq.
E
8.3
Tag
:92a::
Qualifier
WITF
Decision Date
Implement. Date
Sept. 2011
Update Date
Nov. 2012
Open Item Ref.
CA 170
Placement of non-DPRP data elements
Please refer to the Global Market Practice – Part 2 document published on the SMPG website, www.smpg.info
into the “Data Element Placement” section for a summary of the non-DPRP data elements placement
recommendations.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
April 2011
Nov. 2011
Update Date
Open Item Ref.
CA 206
8.3.1 Usage Of “UKWN” and “OPEN” for DPRP Elements
Whenever DPRP elements are indicated as mandatory for a specific event in the EIG+ table, those elements
must be present in the announcement message either with an actual value or with an “Unknown” (UKWN) code
if a value is not yet in possession of the service provider.
When DPRP elements are indicated as optional for a specific event in the EIG+ table, then the service provider
is free to include those elements in the message with a “Unknown” (UKWN) code if still not in possession of the
information or alternatively not to include them.
Note: If an optional DPRP element is applicable to a particular event, it is recognized however that the above
principles will not always be easily applicable for the market data providers.
The SMPG recommends to no longer use the code value “OPEN” (Open-date) for the DPRP elements as it is
deemed fully redundant with the “UKWN” code and will be removed with SR2011.
SR2012 V1.0
Page 63
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Seq.
Tag
D, E,
E1&
E2
98a,
69a,
92a,
90a
8.4
Qualifier
Decision Date
Implement. Date
AUGUST 2010
NOV-2010
Open Item Ref.
Update Date
CA127 &CA
127.1
Events with multiple proceeds
Remark: there is no order imposed by the table below for credit and debit elements. They can appear in any
order.
In this case, MT 564 subsequence E1/E2 should be repeated to indicate the ISIN (for E1) and the resulting
entitlement.
Scenario
Receive 1
new
Security
Receive 2
new
Securities
Receive 1
new
Security
and debit
of old shs
or rights.
Receive 2
new
securities
and debit
of old shs
or rights.
Receive
Cash Only
Receive
Cash and
debit
existing
security.
Seq.
- E to report the option only.
- E1 to report the ISIN (credit), terms and resulting entitlement.
Here E1 is used to report the terms as well as the resulting entitlement.
- E to report option only.
st
- E1 to report the 1 ISIN (credit), terms and resulting entitlement (if provided)
nd
- E1 to report 2 ISIN (credit), terms and resulting entitlement (if provided)
Here E1 is used to report the terms as well as the resulting entitlement.
- E to report option only.
- E1 to report ISIN (credit), terms and resulting entitlement (if provided)
- E1 to report debit of old or rights (if provided)
Here E1 is used to report the terms as well as the resulting entitlement.
- E to report option only.
st
- E1 to report the 1 ISIN (credit), terms and resulting entitlement (if provided)
nd
- E1 to report 2 ISIN (credit), terms and resulting entitlement (if provided)
- E1 to report debit of old or rights (if provided)
Here E1 is used to report the terms as well as the resulting entitlement.
- E to report the option and rate/price.
- E2 to report the cash movement (credit) and resulting entitlement (if provided)
E2 used to report part of the terms as well as the resulting entitlement.
E to report the option and price.
E1 to report the debit of the old shares and resulting entitlement (if provided)
E2 to report the cash movement (credit) and resulting entitlement (if provided)
E2 used to report part of the terms as well as the resulting entitlement.
Tag
Qualifier
E
8.5
Decision Date
Implement. Date
JUN-2001
NOV-2002
Update Date
NOV-2010
Open Item Ref.
CA127 &CA
127.1
Event on more than one underlying securities
The situation is that an event has more than one underlying security, eg you must hold both security A and
security B in order to take part. However, holders of the individual securities (either A or B) must be informed
of the event in order to have the opportunity to purchase the other security.
Agreed market practice is that a notification is sent for each underlying security, using the same CORP
reference and linked by the WITH cross-reference. Note that the benefits may differ by underlying security.
Seq.
A
Tag
Qualifier
Decision Date
Implement. Date
20C
CORP
March 2007
N/A
SR2012 V1.0
Page 64
Update Date
Open Item Ref.
CA82
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
A1
22F
WITH
The events should make it clear that each event is conditional on the other.
This would require some narrative as it might be difficult to link the two events together from a technical
perspective and as the holder of only one underlying securities needs to be aware of the conditions of the
event.
Field 70 with qualifier COMP in sequence F of the MT 564 could be a viable solution for the narrative.
Seq.
A1
8.6
Tag
20C
Qualifier
Decision Date
CORP
JUN-2001
2002
–
Implement. Date
SEP
NOV-2002
Update Date
Open Item Ref.
NOV-2010
Expression of a rate
15 Pct should be expressed as :92A::TAXR//15, and not :92A::TAXR//0,15
Seq.
8.7
Tag
Qualifier
Decision Date
Implement. Date
Simply the
standards
NOV-2002
Update Date
Open Item Ref.
Multiple currencies with a non-convertible currency1
Background:
This is the case where a CA is declared in a specific currency (let's say MYR or KRW). However this currency
is not accepted by an entity or is not convertible. So, the local agent or depository automatically does an FX
into a pre-defined acceptable currency (e.g. USD). But the end customer does have a base currency account
or a standing instruction to repatriate funds into another currency (e.g. EUR).
How to report this case ?
SMPG recommendation: using multiple occurrence of the sequence Cash Movements:
- CR in KRW - PSTA in USD, RESU in USD, NETT in KRW and EXCH rate KRW/USD
- DR in USD
- CR in EUR - PSTA in EUR - RESU in EUR, EXCH rate in USD/EUR
Seq.
Tag
Qualifier
D2
8.8
Decision Date
Implement. Date
JUN-2001
NOV-2002
Update Date
Open Item Ref.
Update Date
Open Item Ref.
Update Date
Open Item Ref.
Notification and confirmation linkage
Is link mandatory between confirmation and notification messages?
SMPG agreed that link is not mandated for market practice.
Seq.
8.9
Tag
Qualifier
Decision Date
Implement. Date
JUN-2001
NOV-2002
Resulting Amount
RESU amount is always in the same currency as PSTA amount
Seq.
Tag
19B
1
Qualifier
Decision Date
Implement. Date
RESU
JUN-2001
NOV-2002
Boston meeting March 2001.
SR2012 V1.0
Page 65
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.10 How to indicate that securities are blocked whenever instruction is received?
Proposed alternatives:
a) MT 566?
b) MT 567 with narrative?
c) Intrapositioning?
Decision: The Group agreed that this is an SLA rather than a global market practice issue, however, a process
flow should be agreed. The preferred solution is that whichever message is used, it should be linked to the
instruction (MT 565). Blocking of securities may be shown (in the SWIFT world) by use of the MT 508 IntraPosition Advice. MT566 is to be used only for confirmation of movements.
Mechanism required to link the intra-positioning advice to the CA instruction.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2001
NOV-2002
Update Date
Open Item Ref.
8.11 On usage of N amount1
Numerous discussions led to the below conclusions:
- The negative sign [N] should not be used at all in corporate action movement sequences.
- For the posting amount (PSTA), the credit-debit indicator provides the information of the direction of the
movement.
- The credit/debit indicator applies only to the posting amount (PSTA)
- The resulting amount has the same (implied) credit/debit indicator as the posting amount (PSTA).
- As for the other amount types, their meanings automatically tell whether they are debits or credits (ex:
withholding = debit).
A list of the default -/+ indicator of each amount qualifier is being reviewed. Once approved, this list will be
published in a next version of this document.
Seq.
E2
Tag
19B
Qualifier
Decision Date
Implement. Date
PSTA, etc.
OCT 2003
MAY 2005
Update Date
Open Item Ref.
8.12 On the use of narrative field2
Narrative fields should only include information that is not formatted elsewhere in the message. If used, it
should be with an existing dedicated field and following ISO 15022 Standards guide lines on the subject
(available in APPENDIX 2, see end of the document).
It is to be noted that tax specific disclaimers should be handled by SLA.
Seq.
Tag
70a:
Qualifier
Decision Date
Implement. Date
all
JUN 2003
MAY 2005
Update Date
Open Item Ref.
Update Date
Open Item Ref.
8.13 Fractions paid3
Agreement that following business data required when fractions are involved:
- Price at which cash given for fractions;
- Quantity of fractions exchanged for cash;
- Cash amount given for fractions.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2002
NOV-2002
1
Geneva, Brussels, Luxembourg and Singapore meeting 2002-2003.
Geneva, Brussels, Luxembourg and Singapore meeting 2002-2003.
3
Toronto Meeting June 2002.
2
SR2012 V1.0
Page 66
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.14 Price per Product1
The market required clarification of the price per product definitions used for example for events for which the
holder must pay an amount of cash to receive an amount of cash (in another currency), e.g. (exercise of
warrants).
That is, underlying security A + cash leads to benefit of outturn security B + cash.
The definitions were refined for the price/offer qualifiers used in the corporate action details sequence.
The definitions are:
PRPP - Generic cash price paid per product by the underlying security holder either as a percentage or
an amount, for example, reinvestment price.
OFFR - Generic cash price received per product by the underlying security holder either as a
percentage or an amount, for example, redemption price.
Seq.
Tag
90a
Qualifier
PRPP
OFFR
-
Decision Date
Implement. Date
JUN-2003
MAY 2005
Update Date
Open Item Ref.
8.15 Rejection of pre-advice request for confirmation message2
The group were reminded and affirmed the decision to reject the request for a pre-advice indicator in the
confirmation message (MT 566). It was reminded that this functionality should be catered for in an MT 564. The
usage of REPE or CAPA function in MT 564 covers this requirement.
Seq.
Tag
23G
Qualifier
Decision Date
Implement. Date
REPE
JUN-2002
NOV-2002
Update Date
Open Item Ref.
NOV-2010
8.16 On negative and zero balances
If an eligible balance is negative, it may be reported as such in the MT 564. Zero balance should not be
provided as no entitlement exists. Offer Types
It is possible for offer types to change during the course of an event. There is no change of event type (CAEV).
For example, dissenters rights (22F::OFFE//DISS) may be available in the early stages of a merger, and
removed later in the event.
8.17 Offer Types
It is possible for offer types to change during the course of an event. There is no change of event type (CAEV).
For example, dissenters rights (22F::OFFE//DISS) may be available in the early stages of a merger, and
removed later in the event.
Pool factors3
8.178.18
New factor (NWFC) identifies the factor for the current event and previous factor (PRFC), the factor that
applied before.
Thus the previous factor applies before the redemption date of the event and the new factor applies after the
redemption date of the event. The difference between the two factors is used to calculate the payment.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
B1
92a
NWFC
PRFC
N/A
N/A
Update Date
Open Item Ref.
SR2007
1
Toronto meeting June 2002.
Toronto meeting June 2002.
3
Frankfurt meeting April 2005.
2
SR2012 V1.0
Page 67
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.188.19
Usage of :92a: Rate Format Option M
The rate Format Option M (:92M:) in the sequences E and E1 of the MT564 defined to express a rate as an
amount per quantity should not be used as usually this results from an erroneous usage of the Standards when
an amount is provided for a quantity of financial instrument.
In those cases, the SMPG recommends instead the usage of the :36B:MILT in E or E1a to express the quantity
in combination with a price.
If we take the example of a takeover / tender offer, where company A wants to provide an offer price of $1000
for 3 shares of company B, then OFFR should be used to provide the offer price per share and 36B:MILT to
mention the quantity (minimum exercisable quantity)
:90B::OFFR//ACTU/USD1000,00
:36B::MILT//UNIT/3,
MILT must be used to describe the number of units applicable to the amount of cash.
If for 1 share, then use simply:
:90B::OFFR//ACTU/USD1000,00
Seq.
E,E1
Tag
Qualifier
92M
8.198.20
Decision Date
Implement. Date
APRIL 2010
NOVEMBER
2011
Update Date
Open Item Ref.
CA168
Usage of UTC Offset Time For Dates
A new Format Option :98E has been created in the Standards for the Date fields in sequences D, E E1 and E2
of the MT564 and C, D, D1, D2 of the MT 566.
This new format option allows to provide a UTC offset time for some dates. The use of this format option
should be handled by SLA and is not required by market practice.
The usage of the UTC offset should be limited to the Account Servicers with across-time zones clients (Global
Custodians) and used only for the following 4 deadline dates in the MT564 sequence E.
Market Deadline (MKDT),
Response Deadline (RDDT),
Lead Plaintiff Deadline (PLDT)
Early Response Deadline (EARD)
The UTC offset should not be used otherwise.
If UTC Indicator is not present in format option E when this format is used, then one shall assume that the time
provided is the GMT time.
Example:
Field 98a: Date/Time Option E :4!c//8!n6!n[,3n][/[N]2!n[2!n]]
(Qualifier)(Date)(Time)(Decimals)(UTC Indicator)
The format to indicate the time 15:23:45 on 16 June 2010, and to specify that this time
is local to New York is:
:98E::MET2//20100616152345/N05
Seq.
E
Tag
98E
8.208.21
Qualifier
Decision Date
Implement. Date
MKDT,
RDDT,
EARD, PLDT
APRIL 2010
NOVEMBER
2011
Update Date
Open Item Ref.
CA183
Usage of CA Option Code for Compensation of Rights Not Distributed
The market practice is as follows:
- If the issuer will compensate rights which cannot be distributed and/or used by beneficiaries due to
restrictions (eg. domicile restrictions), the option code should be CASH.
- If the account servicer offers to sell rights that cannot (or will not) be exercised, the option code should be
SLLE.
SR2012 V1.0
Page 68
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Seq.
E
Tag
22F
8.218.22
Qualifier
Decision Date
Implement. Date
CAOP
JULY 2010
NOVEMBER
2011
Update Date
Open Item Ref.
CA185
Different Servicer Options for Different Deadlines
For elective events, when there are different election deadlines set for an event i.e. for instance one early
deadline with an early bonus fee and a normal deadline, different servicer options with a different deadline for
each should be created so as to ease the instructions processing.
Seq.
E
Tag
13A
Qualifier
Decision Date
Implement. Date
CAON
December 2010
NOVEMBER
2011
Update Date
Open Item Ref.
CA191
8.23 NOAC For VOLU Events
The SMPG recommends that the option code NOAC be present in the list of options of all VOLU events.
Seq.
E
Tag
22F
Qualifier
Decision Date
Implement. Date
CAOP
May 2012
Nov-2011
Update Date
Open Item Ref.
CA192
8.24 Usage of CA Option Code for Unknown Proceeds (PRUN)
The CA option code for unknown proceeds should be used for elective events in case the proceeds are not
known during the election period. The option code should be maintained throughout the full lifecycle of the
event, i.e. even when proceeds become known.
Seq.
E
Tag
22F
Qualifier
Decision Date
Implement. Date
CAOP
Aug-2011
Nov-2012
Update Date
Open Item Ref.
SR2012 CR
Example:
A voluntary conversion where the holder's right to convert securities into common stock is subject to the
company's right to elect to pay cash or a combination of both cash and stock for the notes.
In the MT564:
13A::CAON//001
:22F::CAOP//PRUN
:17B::DFLT//N
:98C::MKDT//20110127170000
:16R:SECMOVE
:22H::CRDB//DEBT
:35B:ISIN US635405AW30
:98B::PAYD//UKWN
:16S:SECMOVE
:16S:CAOPTN
:16R:CAOPTN
:13A::CAON//002
:22F::CAOP//NOAC
:17B::DFLT//Y
:16S:CAOPTN
Holder elects PRUN, in the MT565:
SR2012 V1.0
Page 69
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
:16R: CAINST
:13A:: CAON//001
:22F:: CAOP//PRUN
:36B:: QINS//UNIT/2000,
:16S: CAINST
Instruction is accepted, MT567:
:16R: STAT
:25D:: IPRC//PACK
:16S: STAT
:16S: GENL
:16R: CADETL
:13A:: CAON//001
:22F:: CAOP//PRUN
:36B:: STAQ//UNIT/2000,
:16S: CADETL
Details of the proceeds are announced, MT564:
13A::CAON//001
:22F::CAOP//PRUN
:17B::DFLT//N
:98C::MKDT//20110127170000
:16R:SECMOVE
:22H::CRDB//DEBT
:35B:ISIN US635405AW30
:98B::PAYD//20110130
:16S:SECMOVE
:16R: SECMOVE
:22H:: CRDB//CRED
:35B: ISIN US0031544546
:92D:: NEWO//1,/40,
:98A:: PAYD//20110130
:16S: SECMOVE
:16S:CAOPTN
:16R:CAOPTN
:13A::CAON//002
:22F::CAOP//NOAC
:17B::DFLT//Y
:16S:CAOPTN
Payment is confirmed, MT566:
:16R: CACONF
:13A:: CAON//001
:22F:: CAOP//PRUN
:16R:SECMOVE
:22H::CRDB//DEBT
:35B:ISIN US635405AW30
:36B:: PSTA//UNIT/2000,
:98B::POST//20110130
:16S:SECMOVE
:16R: SECMOVE
:22H:: CRDB//CRED
:35B: ISIN US0031544546
:36B:: PSTA//UNIT/50,
:92D:: NEWO//1,/40,
:98A:: POST//20110130
:16S: SECMOVE
SR2012 V1.0
Page 70
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.25 Accrued interests with a security proceed
In case accrued interests have to be paid with a security proceed, what should be the CA option code?
Possible solutions:
a) create a CASE option
b) create a cash move within the SECU option
The market practice is NOT to use CASE in such a situation. The option is definitely SECU from a business
perspective with a side cash payment, hence solution b) should be applied (similarly to what is done for cash
on fractions).
Seq.
E
Tag
22F
Qualifier
Decision Date
Implement. Date
CAOP
Sept-2011
Nov-2012
Update Date
Open Item Ref.
SR2012 CR
8.26 Payment occurrence indicator
The Payment Occurrence Type Indicator, DITY, specifies the conditions under which a payment will occur. It is
recommended for events which may be paid in two or more stages (interim, INTE, and final, FINL) such as
liquidations or for rolling events (ROLL). It is not recommended for events paid in one stage only, with a fixed
pay date. (Please note that DITY does not replace the DIVI and CONV indicators.)
Seq.
D
Tag
22F
Qualifier
Decision Date
Implement. Date
DITY
2011
Nov-2012
Update Date
Open Item Ref.
SR2012 CR
8.27 Certification / Breakdown
Information regarding certification and breakdowns can be included in three fields: the Certification /
Breakdown indicator, flag and narrative.
MT564
The flag in the CADETL (D) sequence specifies if certification/breakdown is required on an event level.
There is no requirement to include the flag if certification/breakdown is not required for the event.
The indicator in the CAOPTN (E) sequence specifies the type of certification/breakdown required for
the option. It should only be used if required.
The flag in the CAOPTN (E) sequence specifies if certification/breakdown is required for the option.
There is no requirement to include the flag if certification/breakdown is not required for the option.
The narrative field in the CAOPTN (E) sequence provides additional information about the required
certification/breakdown. It should only be used if required.
MT565
The indicator in the CADETL (C) sequence specifies the type of certification/breakdown included in the
MT565.
The narrative field in the ADDINFO (E) sequence provides additional information about the
certification/breakdown included in the MT565.
MT566
The flag in the CADETL (C) sequence specifies if certification/breakdown is required on an event level.
There is no requirement to include the flag.
Seq.
Tag
SR2012 V1.0
Qualifier
Decision Date
Implement. Date
2011
Nov-2012
Page 71
Update Date
Open Item Ref.
SR2012 CR
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
8.28 Clarification on the meaning of PRPP when used in an event with ADEX
PRPP is always the price of one unit of product, irrelevant of the ratio of the distribution of the event (ADEX).
If both ADEX (in E1) and PRPP (in E2) are present for the same option, PRPP will always be the price of one
unit of product, irrespective of the ratio expressed in ADEX.
Seq.
E2
Tag
:92a::
SR2012 V1.0
Qualifier
Decision Date
Implement. Date
PRPP
Sep-2011
Nov-2012
Page 72
Update Date
Open Item Ref.
SR2012
MWG
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
9 Market Practices on Particular Events
9.1
Rights Issues
One or two event types?
At its Madrid meeting in October 2005, the SMPG agreed that the general way forward is to migrate to process
1
rights as two events.
See the EIG for the status of migration per market.
9.1.1 One event
If a Right Issue is handled as one event, the Corporate Action Event indicator should be Rights Issues and the
Sequence C is to be used to give the details on the rights.
2
This event is a Mandatory with options CA event and an instruction is required (:22F::CAMV//CHOS).
More than one MT 566 conformation message must be sent, i.e. not mandatory to confirm all the benefits in a
single message.
It is to be noted that if the ISIN of the rights is not known, UKWN is to be used as a code word.
9.1.2 Two events
If a Right Issue is handled as two event, the Corporate Action Event indicator if the first event should be Rights
Distribution (RHDI) and the Sequence C is NOT to be used to give the details on the rights but sequence E
instead. This first event is considered as a free distribution of the rights or nil paid stock.
Note that in the second event CAMV should be CHOS and not MAND.
The two events do not need to be linked.
Please refer to the SMPG CA samples document for an illustration of the two events scenario.
There may be an issue with the length of the period from the issue of the rights to the exercise or follow-up
event which give details of the rates and prices associated with the rights themselves. If the rights are received
late it is difficult to distribute the information before the rights position is set up.
Agreed that this is a servicing issue, not a market practice issue.
9.1.3 Illustration: One Event
Sequence A
22F::CAEV//RHTS
22F::CAMV//CHOS
Sequence C is present
Sequence E contains the different options as per SLA
22F::CAOP//SECUEXER
22F::CAOP//LAPS
22F::CAOP//OVER
22F::CAOP//NOAC
Sequence E may contain the following options from the account servicer:
22F::CAOP//SLLE
22F::CAOP//BUYA
1
2
Madrid meeting October 2005
Correction of an issue identified in Geneva meeting September 2002.
SR2012 V1.0
Page 73
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
22F::CAOP//LAPS
9.1.4 Illustration: Two Events
1. First event
Sequence A
22F::CAEV//RHDI
22F::CAMV//MAND
Sequence C is NOT present
Sequence E contains the different options as per SLA
:22F::CAOP//SECU
:22F::RHDI//EXRI
2. Second Event
Sequence A
:22F::CAEV//EXRI
:22F::CAMV//CHOS
:20C::CORP//
:16R:LINK
:20C::CORP//
applicable
:16S:LINK
-> this should be another event number than event One
->
this is to link this second event to the first event if
Sequence C is NOT present
Sequence E may contain the following options from the issuer:
:22F::CAOP//EXER
:22F::CAOP//LAPS
:22F::CAOP//OVER
:22F::CAOP//NOAC
Sequence E may contain the following options from the account servicer:
:22F::CAOP//SLLE
:22F::CAOP//BUYA
The following enhancements support the 2 events method in the MT564 message:
- Addition of the existing qualifier (TRDP) for “Rights Trading Period” in the existing period field 69a in
sequence E1 in MT 564.
-
-
Addition of qualifier ADEX to sequence E1
Additional decisions:
1. The ISIN of the rights and the Rights trading period should be defined either in sequence C or in
sequence E but not in both.
2. If the corporate action event is a rights distribution, it is not allowed to use sequence C.
3. In a Rights distribution event (RHDI) , do not repeat all the options that have to appear only in the
Rights Exercise event (EXRI).
4. Agreed that LAPS should be used as potentially a different tax treatment from NOAC.
5. Buy and Sell options are dependent on the SLA as strictly they are added by service providers rather
than being part of the event.
Seq.
Tag
SR2012 V1.0
Qualifier
Decision Date
Implement. Date
Page 74
Update Date
Open Item Ref.
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
JAN-2001
NOV-2002
9.1.5 Confirmation of rights distribution
Regardless of the method used to inform on rights issues, the rights credit confirmation should be done via an
MT 566 bearing the reference of either the rights issue event (case of one event) or the rights distribution event
(case of two events).
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2001
NOV-2002
Update Date
Open Item Ref.
When processing rights as one event, the posting of the rights can be done with mention of option code
:22F::CAOP//SECU, even though this SECU option was not provided on the MT 564 notification.
Seq.
D
Tag
22a
Qualifier
CAOP//SECU
Decision Date
Implement. Date
NOV-2004
MAY-2005
Update Date
Open Item Ref.
9.1.6 Sale of Rights
The Sale of rights is not always an offered option.
However, when it is offered, and an Corporate action instruction (MT 565) is received to execute the sale of
rights, the sale confirmation should be done via an MT 566 and not via a trade confirm message (MT 515).
The trade confirm message will be used if the sale of rights has been instructed directly to the sales desk vian
MT 502 or other means and never when the rights sale has been instructed indirectly via the Corporate action
area.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2001
NOV-2002
Update Date
Open Item Ref.
9.1.7 Rights Expiration Notification
Account servicers wishing to explicitly advise their account owners of the expiration of their rights may do so by
sending an MT 566 to confirm the debit of the rights. The MT 566 will include the expiry date and exercise
period.
Seq.
9.2
Tag
Qualifier
Decision Date
Implement. Date
NOV-2004
MAY-2005
Update Date
Open Item Ref.
Offer
- which MT to confirm an offer results ?
- which MT to confirm an offer rejection ?
1
The Group agreed that the existing codes, withdrawal etc. are sufficient. MT 564 to be used for withdrawal.
Seq.
A
9.3
Tag
Qualifier
23G
Decision Date
Implement. Date
JAN-2002
NOV-2002
Update Date
Open Item Ref.
On Payment of and principal amount2 and PRII
Guidelines to the usage of MT 564/MT 566 messages to announce/confirm the combined payment of Interest
and Principal (Corporate bond at Maturity, Mortgage back Security).
1
2
London meeting January 2002.
Brussels meeting June 2003.
SR2012 V1.0
Page 75
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Should a custodian announce/confirm each type of cash movement (Interest or Principal) in a separate MT
564/MT 566 or should they be combined within one message using different qualifiers for the amounts in field
19B (Amount) of subsequence D2 (Cash Movements) of the message?
Also for P&I announced via one MT 564, it is accepted to confirm a combined payment of Principal and interest
via 2 separate MT 566?
The SMPG view is now that two events should be used. The use of CAEV//PRII does NOT indicate whether
the principal repayment involves a reduction of nominal value or not,
The SMPG group agreed that it should now be handled in two events (INTR; interest payment and PRED:
partial Redemption Without Reduction of Nominal Value. Any use of CAEV//PRII is now specific national
market practice and should be documented as such (eg in the AU and US markets).
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2002/NOV 2004
9.4
MAY 2005
Update Date
Open Item Ref.
May 2011
CA 56/142
Advising distribution rates for dividend with options involving a compulsory
cash rate
Should field 92a appear in one option in Block E?
For example:
New World Development Final dividend HKD 0.84
HKD 0.84 per share
HKD 0.01 Compulsory cash rate
HKD 0.83 in the form of cash with scrip option.
How should Block E be formatted for the above example?
1
The SMPG recommendation is that this type of process should be treated as two events :
- One for the compulsory cash
- the other for the cash or stock options.
9.5
Booking out of valueless securities
In order to confirm that valueless subscription rights have been booked out, the qualifier RHTS is used – as
this relates to the original event. In order to confirm that valueless warrants have been booked out, the qualifier
EXWA is used – as this relates to the original event. How can we confirm that valueless securities - derived
from liquidation or a bankruptcy that started years ago – are booked out?
2
The SMPG recommendation is that the Worthless event (WRTH) „booking out of valueless securities‟ is most
appropriate if this is part of a Corporate Actions.
However, if a client has asked to have them “booked off” without waiting the end of the legal process for
example, then it is a deliver free settlement event.
9.6
Redemption of short term note
Short term note with:
- a redemption option,
- at the same time rolled over to a new note upon maturity if redemption is not exercised.
3
The SMPG recommendation is that it should be handled as a single redemption event with two options.
1
Brussels meeting June 2003.
Brussels meeting June 2003.
3
Brussels meeting June 2003.
2
SR2012 V1.0
Page 76
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
9.7
Clarification of CAEV//DVOP (Dividend Option) and Currency Options
:22F::CAEV//DVCA must be used with :22F::CAMV//CHOS if there is a choice of currencies in which the cash
may be distributed. If any option involves a security in place or in addition to cash then CAEV//DVOP must be
used.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
22F
CAEV
APRIL-2005
NOV-2006
A
9.8
Update Date
Open Item Ref.
Adjustment of Interest Rate
When :22F::CAEV//CPNR was deleted in SR2006 the ICSDs‟ proposal on how to indicate that a notification
carries rate fixing information was agreed.
MT564 CAEV//INTR with
23G:NEWM
25D::PROC//ENTL
or
23G:REPE
is a pre-advice message.
Any other combination of 23G and/or 25D is a rate fixing message.
Seq.
9.9
Tag
Qualifier
Decision Date
Implement. Date
APRIL-2006
NOV-2006
Update Date
Open Item Ref.
CA 65
CAEV//DRAW – What to use in place of REDM Qualifier (deleted in SR2006)
SR2006 removed the REDM qualifier
:92A::REDM//25,
:90A::REDM//PRCT/100,
Agreed syntax:
:92A::RATE//25,
:90A::OFFR//PRCT/100,
Seq.
Tag
Qualifier
Decision Date
Implement. Date
90a
92a
OFFR
RATE
October 2006
NOV-2007
D
Update Date
Open Item Ref.
CA88
9.10 Use of Previous and Next Factors
Affirmed at the SR2007 maintenance meeting that no more than two factors are needed (i.e. Previous and New
factor) for one corporate action event. The requirement [for a current factor] could be fulfilled by announcing
the next event in another MT 564, using again Previous and New factor.
For example, relative to a specified redemption date, the previous factor applies before that date and the new
factor applies on and after that date.
Please refer to the ISITC US Market Practice document in section on “subsequence B1 Financial Instrument
Attributes” for more information on the usage of the previous factor (:92a::PRFC) and next factor
(:92a::NWFC).
Sequen
ce
FIA
SR2012 V1.0
Tag
Qualifier
92a
PRFC
NWFC
SMPG
Decision
Date
October 2006
Page 77
SMPG
Date
N/A
Implementation
Agenda
Ref
SR2007
III.64
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
9.11 The OTHER Event
SMPG recommends that this event is not used - no recommendation for options
Seq.
Tag
Qualifier
Decision Date
Implement. Date
Telco October 2005
N/A
Update Date
Open Item Ref.
In addition unconfirmed and rumoured events must not be notified using CAEV//OTHR, the appropriate CAEV
code must be used.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
March 2007
N/A
Update Date
Open Item Ref.
CA108
9.12 Placement of Cash Rates / Prices at Cash Movement Sequence
Until rates are available at the cash movement level, market practice is to report one rate at option level and
the other rate in the narrative.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
November 2009
November 2010
Update Date
C
Open Item Ref.
CA170
9.13 Tax rate and taxable quantity for Stock Dividend events
For markets/events where the tax authority requires a tax to be paid in securities, rather than cash, the SMPG
recommendation is to use two SECMOVE sequences, one with credit and one with debit, and the tax details in
narrative.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
November 2009
November 2010
Update Date
Open Item Ref.
CA164
9.14 Use of Unknown code with Fraction Dispositions (DISF)
Fraction disposition is not critical information, and hence there is no requirement to report DISF with the value
UKWN. However, if there is a market rule for DISF, or if the issuer has announced the disposition, it should be
reported.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
November 2009
November 2010
Update Date
Open Item Ref.
CA131
9.15 Class Action in the US (MAND or VOLU)
The key principles are:
− CLSA is not considered as a VOLU at the time it is filed but as a GENL.
− Once the court has approved it (sometimes several years later), then a CHOS CLSA is created with
the possibility for the Account Servicer to indicate what options are supported if any.
There is no requirement to keep the same CORP as it is perceived as difficult to manage when the CAMV
changes for the same event.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
November 2009
November 2010
Update Date
Open Item Ref.
CA138
9.16 Removal of TDMT (taxable income per dividend/share)
The SMPG recognises the business need to inform of non-taxable income, but this should be expressed as a
rate (as all other income information) and recommends that the price qualifier is removed from both D and E
and replaced with rate (qualifier or code) information in E.
SR2012 V1.0
Page 78
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Seq.
Tag
Qualifier
Decision Date
Implement. Date
November 2009
November 2011
Update Date
Open Item Ref.
CA165
9.17 Use of Effective Date
−
Seq.
Effective Date is to be used in events where there is no concept of entitlement, for instance Name
Change (CHAN) or Place of Incorporation (PLAC), and
Effective Date is to be used in events where there is a sense of eligibility but with a legal obligation, for
instance Merger (MRGR).
Tag
D
Qualifier
98a
Decision Date
Implement. Date
May 2009
November 2010
Update Date
Open Item Ref.
CA127 ,
127.1
9.18 Redemption after PCAL/PRED Partial Redemption
The last redemption of a bond that has been partially redeemed before via PCAL or PRED must be done via a
REDM event if done at final maturity according to the terms of the event or via MCAL in case of an early final
maturity.
Seq.
A
Tag
22F
Qualifier
CAEV
Decision Date
Implement. Date
Amsterdam Octobre
2010
Update Date
Open Item Ref.
CA 06.13
November 2011
9.19 Timeline for Dividend Reinvestment without Interim Line – Voluntary
Event announced as a mandatory cash dividend, followed by a “Dividend Reinvestment” (DRIP).
The Ex and Record Date of first event will be have the same value in the second event.
First event
SeqA: CAEV//DVCA
SeqA: CAMV//MAND
SeqB: 35B Security A
SeqE: Option CASH (GRSS) -- Credit Cash
Key dates
Ex date
Payment
date
Record date
Second event
SeqA: CAEV//DRIP
SeqA: CAMV//VOLU
SeqB: 35B Security A
SeqE: Option SECU (PRPP) -- Debit Cash Credit Security A
SeqE: Option NOAC (keep the cash that was distributed in first event)
Key dates
SR2012 V1.0
Page 79
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Ex
date
Seq.
Tag
Qualifier
Record
date
Market
deadline date
Decision Date
2011
Payment
date
Implement. Date
Update Date
Nov-2012
Open Item Ref.
CA 139
9.20 Cash Distribution From Non-Eligible Securities Sales
The new event code for Cash Distribution From Non-Eligible Securities Sales, DRCA, is only to be used for
distribution to shareholders of cash resulting from the selling of non-eligible securities, eg. in the frame of a
depositary receipt program. If the event that generated the non-eligible securities was announced to the
shareholders, the two events should be linked.
Seq.
Tag
Qualifier
Decision Date
2011
Implement. Date
Update Date
Open Item Ref.
SR2012
MWG
Nov-2012
9.21 Cash distributions with two or more components
The SMPG recommends a multiple event scenario for cash distributions composed of more than one type. The
different “components” of the cash distribution, such as long-term and short-term capital gain, should be split
into separate events.
Seq.
Tag
Qualifier
Decision Date
2011
SR2012 V1.0
Implement. Date
Nov-2012
Page 80
Update Date
Open Item Ref.
SR2012
MWG
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
10 Market Claims and Interest Compensation
This section provides market practice guidelines about the notification from an account servicer to an account
owner that a claim has been made against the account owner‟s account.
10.1 Business Data Required and Message Flow
The message to be used is the MT 566 corporate action confirmation.
The business data required specifically for the confirmation of a market claim are:
- An indication that the confirmation message confirms an account movement because of a market
claim;
- The reference of the related corporate action (using the CORP qualifier) should be provided and not a
dummy reference such as NONREF;
- A cross reference to the originating trade by either or both of the references of the originating
settlement instruction (MT 540-3) and the originating settlement confirmation (MT 544-547);
- The balance of securities generating the claim – the quantity of securities of the originating settlement
instruction/confirmation;
- The amount of the claim.
10.1.1 Indication that Confirmation is for a Claim
As from Standards Release 2005, new qualifier „additional business process‟ :22F::ADDB// should be used.
The indicator has two codes, the first of which is relevant for claim / income compensation:
1) CLAI: Claim or compensation – the posting is related to a claim on the associated corporate action event.
2) TAXR: Tax refund – The posting relates to a tax refund from the authorities on the associated corporate
action event.
10.1.2 Originating Settlement Transaction
The originating settlement instruction as a related reference (qualifier RELA in the A1 Linkage sequence), with
linked transaction number 540, 541 or 542, 543 typically depending on whether is a corresponding credit or a
debit. This reference, if applicable, is preferred as it makes more sense to the customer. The RELA could also
be used to link to trade instructions reference or a stock exchange reference and should always be the qualifier
to be used except in the case herebelow where PREV is relevant.
And/Or
The originating settlement confirmation as a related reference (qualifier PREV in the A1 Linkage sequence),
with linked transaction number 544, 545 or 546 547 typically depending on whether is a corresponding credit or
a debit.
Note 1: the corporate action reference is mandatory in the message also.
Note 2: In certain markets, a single claim may arise from more than one transaction.
10.1.3 Balance of Settlement Transaction
The balance of securities generating the claim – the quantity of securities of the originating settlement
instruction/confirmation, carried as the confirmed balance in the MT 566 (93B::CONB), the recommended
format is option B as the balance type codes required in option C are not relevant.
10.1.4 Amount of Claim
Carried in the amount field 19B using the MKTC qualifier.
MKTC should be equal to PSTA
If the market claim is paid in a different currency the PSTA amount will use the currency of the resulting
amount (RESU).
SR2012 V1.0
Page 81
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Seq.
Tag
Qualifier
Decision Date
Implement. Date
E2
19B
MKTC and
PSTA
March 2007
N/A
Update Date
Open Item Ref.
CA90
10.2 Other Observations
Notification of A Forthcoming Debit/Credit Claim
For clients who require notification of a forthcoming debit claim, the MT 564 corporate action notification
message is used with the business data identified above.
The balance qualifier to be used is SETT recommended with the B format or the C format with the NELG (not
eligible) balance code.
MT 566 should not be used to announce a forthcoming debit/credit as it should only be used as a confirmation.
Seq.
Tag
Qualifier
Decision Date
SEPT 2004
Implement. Date
Update Date
MAY 2005
Open Item Ref.
CA90
10.2.1 Value Date on Debit Entries
The supply of Value Date is determined by SLA, it is optional. Payment Date in the MT 564 Notification
indicates when the payment will be made.
10.2.2 Security Claims
These guidelines also apply to security claims.
Seq.
Tag
SR2012 V1.0
Qualifier
Decision Date
Implement. Date
APR 2006
NOV 2007
Page 82
Update Date
Open Item Ref.
CA51
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
11 Proxy Voting Activities in ISO150221
Discussion on Proxy activities has been initiated at the SMPG level and is still ongoing.
It was pointed out that the ISO 15022 messages should offer a good solution since proxy voting is done more
and more via electronic networks. However, there are so many variations on proxy in different countries that
the SMPG should start with some basic functionality in order to allow the custodian to collect voting instructions
from its clients.
There are a couple of options:
a) fit it into the CA messages.
b) start identifying the required elements for proxy, not taking into account these messages.
Thereafter, it should be decided whether new proxy messages should be created or whether the CA messages
can be used.
Action:
a) NMPGs should identify the business flows and data elements required for proxy.
b) They should also consider the proposal from SWIFT, i.e., how to use the ISO 15022 CA messages for
proxy.
The group reviewed the proxy voting proposal from SWIFT:
The group considered the flows and elements required for a long-term solution.
There are 3 business functions to be covered:
- Announcement of the meeting
- Instruction to vote
- Results of the meeting.
These functions were covered in ISO 7775 by
- MT 560 - for the announcement.
- MT 561 - for the instruction to vote.
- The Results of the meeting were often communicated using MT 599 or equivalent.
The Securities Maintenance Working Group from April 2000 decided to use the ISO 15022 to cater the proxy
activities. The following flow was agreed:
- MT 564 (linked to MT 568 if needed) for the announcement.
- MT 565 for the instruction to vote.
- MT 568 for the results of the meeting.
11.1 Announcement
MT 564 with the following characteristics:
- Event Type = MEET, XMET, OMET or CMET
- Mandatory/Voluntary Indicator: TBD
- Linkage to MT 568 if necessary
Details of the meeting:
- 98a::MEET - meeting date
- 98a::RDDT - Response Deadline (either in sequence D or in sequence E if options are given).
Options available:
(options could be given or not based on SLA, the option given are dependent on country practices).
22F::CAOP//4!c where 4!c =
1
CONY Consent Granted Event or proposal approved. This applies to all resolutions.
Brussels meeting June 2001.
SR2012 V1.0
Page 83
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
-
-
CONN Consent Denied Event or proposal not approved. This applies to all resolutions.
ABST: Abstain Vote expressed as abstain. In this case, the issuing company will add the number of shares
to the quorum of the meeting. If the voting right is not executed, it will not be added to the quorum. In this
case, code NOAC should be used.
SPLI: Split Instruction Option to give a split instruction, e.g., a split voting instruction on a Meeting for
example Yes on resolution 1, No on resolution 3 and 4, Abstain on resolution 2.
PROX: Proxy Card Issue a proxy card in case of voting.
The CA Narrative field in the MT 564 will be used to give the details of the meeting and a subsequent MT 568
used if the available space in the narrative is not sufficient.
Some details of the meeting do not have a formatted field:
- Meeting Place
- Registered Name and Place of the company
The Linked MT 568 would contain:
- the same CA Reference (:20C::CORP) in the linkage block
- the event type is MEET, XMET, OMET or CMET.
- a link to the MT 564 (linkage :20C::PREV)
- the details of the agenda in sequence C.
11.2 Instruction (MT 565)
The MT 565 will have the following characteristics:
- CAEV: MEET, XMET, OMET or CMET
- CORP referencing to the MT 564 CORP
- CAOP: One of the CAOP listed in the MT 564.
The vote is often expressed as a bulk vote, i.e. vote in favour for all resolutions, or against for all.
However, there is the possibility to indicate a split vote instruction using CAOP=SPLT.
However, if CAOP= SPLT is used then a (mandatory) narrative is to be given to explain the vote.
11.3 Results (MT 568)
CAEV:: MEET, XMET, OMET or CMET
This MT 568 should reference to the original CORP.
It is not necessary to reference it to the instruction sent as some holders do not wish to vote but want to be
kept posted of the results.
11.4 Status (MT 567)
The MT 567 will be used as per the normal way to acknowledge the instruction or reject it.
Some specific reason code might need to be defined for example when a split vote instruction is received and it
is not allowed in that country.
Please not that the proxy event is a particular events and some of the Market Practice rules defined for other
events will not applied.
For an illustration, see Proxy_scenario_v5_6.pdf available on www.smpg.info.
Note: Some specific Proxy Voting messages have beeen developed by SWIFT on behalf of ISO and will be
available in 2H2007 following a pilot.
SR2012 V1.0
Page 84
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN-2001
NOV-2002
Update Date
Open Item Ref.
11.5 Proxy - Specification of Beneficiary/Intermediary Details in the Instruction1
In some cases the details required may be those of an intermediary rather than the beneficiary.
It is recommended to put all beneficiary details in the dedicated sequence of the instruction message
(sequence BENODET of the MT 565), including the use of the narrative.
Any intermediary details should be populated in the registration details narrative of the additional details
sequence (:70E::REGI of ADDINFO of MT 565).
Seq.
Tag
Qualifier
Decision Date
Implement. Date
JUN 2003
MAY 2005
Update Date
Open Item Ref.
11.6 Proxy - Split Voting2
The group were reminded that split voting requires narrative and/or additional instruction messages.
Seq.
1
2
Tag
Qualifier
Decision Date
Implement. Date
JUN-2002
NOV-2002
Update Date
Open Item Ref.
Brussels meeting June 2003
Toronto meeting June 2002
SR2012 V1.0
Page 85
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
12 ISO 15022 - 20022 Coexistence Rules
In December 2009, a new set of fourteen ISO 20022 corporate action messages have been published by ISO.
Twelve of those ISO 20022 messages were directly reversed engineered from the 5 ISO 15022 corporate
action messages. However, in ISO 20022, a few of the basic data types reused in the messages design are
not fully aligned with those of ISO 15022.
Therefore, as both message standards will coexist for a certain number of years, until this coexistence period
ends, the usage of certain ISO 20022 data types must be restricted to ensure interoperability between ISO
15022 and 20022 users. This has been done in the ISO 20022 CA standards by adding specific coexistence
restrictions at some places in the messages.
In the ISO 20022 Message Definition Report document for Corporate Action, the coexistence restrictions are
described in Textual Rules linked to the Message Items they concern; these coexistence textual rules are
named by convention “Coexistence[Xxxx]Rule” name where [Xxx] is the type of element on which the rule
applies.
Adherence to these coexistence rules is mandatory when using the ISO 20022 corporate action messages in a
coexistence environment.
Seq.
Tag
Qualifier
Decision Date
Implement. Date
November 2009
November 2010
Update Date
Open Item Ref.
CA145
Sample of coexistence rules found in the ISO 20022 CA MDR document
Coexistence Rule Name
CoexistenceIdentificationRule
CoexistenceAmountRule
CoexistenceQuantityRule
Coexistence35to30TextFieldRule
CoexistenceCharacterSetXRule
CoexistenceCharacterSetZRule
CoexistenceIssuerSchemeNameRule
CoexistenceNameAndAdressRule
CoexistencePartyProprietaryIdentificati
onRule
CoexistenceIdentificationRule
SR2012 V1.0
Rule Description
During ISO 15022 – 20022 coexistence, all transaction and document
identifications or references must be 16 characters or less. The field
must not start or end with a slash „/‟ or contain two consecutive
slashes „//‟.
During ISO 15022 – 20022 coexistence, Amount length must not be
greater than 15, including the decimal point.
During ISO 15022 – 20022 coexistence, Quantity length must not be
greater than 15, including the decimal point.
During ISO 15022 – 20022 coexistence,
MarketIdentification/Description must be 30 characters or less. The
field must not start or end with a slash „/‟ or contain two consecutive
slashes „//‟.
During ISO 15022 – 20022 coexistence, characters used in all text
fields (except AdditionalInformation/AdditionalInformation) must
correspond to ISO 15022 character set X, that is, a-z A-Z / - ? : ( ) . , „
+ { } CR LF.
During ISO 15022 – 20022 coexistence, characters used in
AdditionalInformation must correspond to character set Z, that is, a-z
A-Z / - ? : ( ) . , „ += ! “ % & * < > ; @ # { CR LF.
During ISO 15022-20022 coexistence, Issuer length must be 4
characters and SchemeName length must be 4 characters or less.
Issuer and Scheme Name must be an ISO registered Issuer and
SchemeName.
During ISO 15022 – 20022 coexistence, the total of characters used
in NameAndAddress must not be greater than 140.
During ISO 15022 – 20022 coexistence, Party ProprietaryIdentification
must be 34 characters or less. The field must not start or end with a
slash „/‟ or contain two consecutive slashes „//‟.
During ISO 15022 – 20022 coexistence, all transaction and document
identifications or references must be 16 characters or less. The field
must not start or end with a slash „/‟ or contain two consecutive
slashes „//‟.
Page 86
21 February 2012
SMPG Corporate Actions - Global Market Practice: Part 1
END OF DOCUMENT
SR2012 V1.0
Page 87
21 February 2012